If the demand for a product is perfectly inelastic and the supply curve is upsloping, a $1 excise tax per unit of output will

Question

Quizplus · Accepted Answer

When demand is perfectly inelastic, consumers are willing to pay any price for a given quantity. Therefore, a $1 excise tax per unit of output will be fully passed on to consumers, raising the price by exactly $1, regardless of the slope of the supply curve.

If the Demand for a Product Is Perfectly Inelastic and the Supply