For a Given Supply Curve, How Does the Elasticity of Demand

question 95

Multiple Choice

For a given supply curve, how does the elasticity of demand affect the burden of a tax imposed on a product?

• A)The excess burden of the tax will be minimised when the demand is unit-elastic.
• B)The excess burden of the tax will be greater when the elasticity of supply is greater than the elasticity of demand.
• C)The excess burden of the tax will be greater when the demand is less elastic than when it is more elastic.
• D)The excess burden of the tax will be greater when the demand is more elastic than when it is less elastic.

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Definitions:

Limited Liability Company

An organizational form blending a corporation's limited liability feature with the pass-through tax benefits of a partnership or sole proprietorship.

Manager Liability

The responsibility and potential legal accountability of managers for actions taken within the scope of their managerial roles.

Limited Liability Company

A corporate structure that integrates the limited liability characteristic of a corporation with the tax-pass-through trait of sole proprietorships or partnerships.

Aggregate

A total or sum made from individual parts.