Except in the extreme cases of perfectly inelastic or perfectly elastic demand and/or supply curves,the burden of a per-unit tax imposed on sellers falls
A) equally on consumers and producers.
B) partially on consumers and partially on producers.
C) entirely on producers.
D) entirely on consumers.
E) mostly on producers.

Question

Quizplus · Accepted Answer

When a per-unit tax is imposed on sellers, the supply curve shifts upward by the amount of the tax, causing the equilibrium price to increase and the equilibrium quantity to decrease. Both consumers and producers bear a portion of the burden of the tax. Consumers pay more for the product due to the higher price, resulting in a decrease in the quantity demanded. Producers receive less revenue due to the higher tax and lower quantity sold. Therefore, the burden of the tax is shared by both consumers and producers, making choice B the correct answer.

Except in the Extreme Cases of Perfectly Inelastic or Perfectly