If Demand for Good Is Very Inelastic and Supply for the Good

question 70

Multiple Choice

If demand for good is very inelastic and supply for the good is very elastic a sales tax imposed on sellers will cause the price received by sellers

• A) would not change very much.
• B) would rise by more than the amount of the tax.
• C) would fall by an amount of the tax.
• D) would fall by more than the amount of the tax.

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Definitions:

Excused

Released from a duty or obligation, often because of a specific reason or circumstance that justifies the exemption.

Perfect Tender Rule

A legal principle that requires sellers to deliver goods exactly as specified in a contract without deviation.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms or standards.

Conforming Goods

Goods that conform to contract specifications.