Suppose the Demand Curve for a Product Is Horizontal and the Supply

question 257

Multiple Choice

Suppose the demand curve for a product is horizontal and the supply curve is upward sloping. If a unit tax is imposed in the market for this product,

• A) sellers bear the entire burden of the tax.
• B) the tax burden will be shared among the government, buyers and sellers.
• C) buyers bear the entire burden of the tax.
• D) the tax burden will be shared by buyers and sellers.