For a given positively sloped supply curve,the price increase to consumers resulting from a specific tax imposed on sellers will be
A) greater the more price elastic demand is.
B) greater the less price elastic demand is.
C) equal to the entire tax when demand is perfectly elastic.
D) equal to half of the tax whenever demand is unit elastic.

Question

Quizplus · Accepted Answer

The price increase to consumers resulting from a specific tax imposed on sellers will be greater the less price elastic demand is. This is because when demand is inelastic, consumers are less responsive to price changes, meaning they will continue to buy the product even as the price increases, allowing sellers to pass more of the tax onto consumers.

For a Given Positively Sloped Supply Curve,the Price Increase to Consumers