The Incidence of a Tax

question 49

Multiple Choice

The incidence of a tax

• A) Falls entirely on consumers if demand is perfectly elastic
• B) Falls entirely on consumers if demand is perfectly inelastic
• C) Is shared by suppliers and consumers if demand is perfectly elastic
• D) Falls entirely on suppliers if demand is perfectly inelastic

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Definitions:

Commissions

Payments made to salespersons or agents based on the sale amount or value they generate, often a percentage of the sales price.

Royalties

Payments made by one party (the licensee) to another (the licensor) for the use of a particular asset, such as intellectual property.

Monitoring Work

The process of overseeing the performance and activities of employees to ensure efficiency, compliance, and security within an organization.

Piece-rates

A payment method where workers are paid a fixed rate for each unit of production completed, incentivizing higher productivity.