If the Supply Curve Is More Inelastic Than the Demand

question 127

Multiple Choice

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

• A) the sellers will bear a greater tax incidence than the buyers.
• B) the sellers will bear a smaller tax incidence than the buyers.
• C) the sellers will bear an equal tax incidence as the buyers.
• D) Any of these could be true.

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Definitions:

Squares

Geometrical shapes with four equal sides and four right angles, or multiplications of a number by itself.

Mean Squared Error

A measure of the average squared differences between estimated and actual values, used to evaluate the accuracy of statistical models.

Exponential Smoothing

A time series forecasting method for univariate data that applies weighing factors which decrease exponentially over time.

Mean Absolute Deviation

A measure of variability that indicates the average distance between each data point and the mean of the data set.