Which of the following statements about the relationship between elasticity and tax incidence are true ? Choose one or more:A. A tax on a good for which both demand and supply are relatively inelastic will cause a relatively large transfer of welfare from consumers and producers to the government. B.The incidence of a tax depends on who the tax is placed on. C.If a tax is imposed on a good with a perfectly inelastic demand, then consumers bear the full incidence of the tax. D.When demand is more inelastic than supply, producers bear more of the incidence of a tax. E.When demand is more inelastic than supply, consumers bear more of the incidence of a tax
Which of the following statements about the relationship between elasticity and tax incidence are true ? Choose one or more:A. A tax on a good for which both demand and supply are relatively inelastic will cause a relatively large transfer of welfare from consumers and producers to the government. B.The incidence of a tax depends on who the tax is placed on. C.If a tax is imposed on a good with a perfectly inelastic demand, then consumers bear the full incidence of the tax. D.When demand is more inelastic than supply, producers bear more of the incidence of a tax. E.When demand is more inelastic than supply, consumers bear more of the incidence of a tax
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Which of the following statements about the relationship between elasticity and tax incidence are true ?
Choose one or more:A.
A tax on a good for which both
B.The incidence of a tax depends on who the tax is placed on.
C.If a tax is imposed on a good with a perfectly
D.When demand is more inelastic than supply, producers bear more of the incidence of a tax.
E.When demand is more inelastic than supply, consumers bear more of the incidence of a tax.
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