A $2.00 increase in the size of a tax on a good will only cause the price for buyers to increase by $2.00 if

Name: A $2.00 increase in the size of a tax on a good will only cause the price for buyers to increase by $2.00 if
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When demand is perfectly inelastic, consumers are completely unresponsive to price changes, meaning they will pay any price for the good. Therefore, a $2.00 tax increase will directly translate to a $2.00 increase in the price for buyers, as their quantity demanded does not change.

A $200 Increase in the Size of a Tax on a a Good