If the Demand for Coffee and the Supply of Coffee

question 135

Multiple Choice

If the demand for coffee and the supply of coffee are both elastic then:

• A)coffee buyers will bear most of the burden of the tax
• B)coffee sellers will bear most of the burden of the tax
• C)the burden of the tax will be shared equally between buyers and sellers
• D)it is impossible to determine how the burden of the tax will be shared

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Definitions:

Equilibrium

a state in economics where supply equals demand, resulting in a stable market condition.

Trigger Strategy

A strategy in repeated games where a player's response is conditioned on past behavior, such as retaliating or cooperating based on the other player's previous actions.

Repeated Game

A strategic interaction that occurs multiple times, allowing players to potentially develop strategies based on past outcomes.

Price Competition

A type of competition in which companies try to attract customers by offering lower prices than their competitors.