-The Demand for Apple Pies Is Perfectly Elastic

question 100

Multiple Choice

-The demand for apple pies is perfectly elastic.If the government taxes apple pies at $1 a pie,then ________.

• A) the seller pays the entire tax
• B) the buyer pays the entire tax
• C) the seller and the buyer split the tax evenly
• D) the seller and the buyer split the tax but the seller pays more
• E) who pays the tax depends on whether the government imposes the tax on pie buyers or on pie sellers

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