Suppose that the government imposes a sales tax on the consumption of soda drinks, which of the following would have the least impact on the producers of soda drinks?

Question

Quizplus · Accepted Answer

When demand for a good is perfectly inelastic, consumers will continue to buy the same amount of the good regardless of changes in price. Therefore, the producers of soda drinks will not feel the impact of the sales tax since consumers will continue to purchase the same amount at the same price.

Suppose That the Government Imposes a Sales Tax on the Consumption