Assuming the Demand Curve Is More Elastic (Flatter) Than the Supply

question 6

Multiple Choice

Assuming the demand curve is more elastic (flatter) than the supply curve, which of the following is true?

• A) The full tax is always passed on to the consumer no matter how flat (elastic) the demand curve is.
• B) The full tax is always passed on to the seller no matter how flat (elastic) the demand curve is.
• C) A smaller portion of sales tax is passed on to the consumer.
• D) It does not make any difference how flat (elastic) the demand curve is; the tax is always split evenly between buyer and seller.

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