Suppose the Demand for Barley Is Perfectly Elastic

question 129

Multiple Choice

Suppose the demand for barley is perfectly elastic.The supply curve of barley is upward sloping.If a tax is imposed on barley,

• A) barley sellers pay the entire tax.
• B) barley buyers pay the entire tax.
• C) the government pays the entire tax.
• D) the tax is split evenly between barley buyers and sellers.
• E) who pays the tax depends on whether the government imposes the tax on barley sellers or on barley buyers.