In a Labor Market in Which Demand Is Perfectly Elastic

question 4

Multiple Choice

In a labor market in which demand is perfectly elastic and supply is perfectly inelastic,who bears a tax levied on the firms?

• A) only the workers
• B) only the firms
• C) both the workers and the firms,although the workers bear more of the tax
• D) both the workers and the firms,although the firms bear more of the tax

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Definitions:

Sales Revenue

The income received by a company from its sales of goods or the provision of services, before any expense deduction.

Merchandise Return

The process of a customer returning previously purchased merchandise back to the seller, often for a refund or store credit.

Customer Refunds Payable

Liabilities on a company's balance sheet representing money owed to customers for returned goods or services that did not meet expectations.

Estimated Returns Inventory

An estimate of the goods or materials that are expected to be returned by customers over a certain period.