If the Demand Curve Is More Elastic Than the Supply

question 76

Multiple Choice

If the demand curve is more elastic than the supply curve,then:

• A) the buyers will bear a greater tax incidence than sellers.
• B) the sellers will bear a greater tax incidence than buyers.
• C) tax incidence will be shared equally by buyer and seller.
• D) None of these is true.

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Definitions:

Trade Balance

The gap between what a country sells to and buys from other countries in terms of goods and services.

Merchandise

Goods that are bought and sold in commerce, particularly those related to retail trade.

Services

Intangible products that are consumed at the point of sale and do not result in ownership of physical goods.

Net Exports

The balance of a nation's trade, measured by subtracting its imports from its exports of goods and services.