
-At harvest time the supply of wheat is perfectly inelastic. If the government taxes wheat at $1 a tonne, then
A) the buyer pays the entire tax.
B) the seller and the buyer split the tax evenly.
C) the seller pays the entire tax.
D) the seller and the buyer split the tax but the seller pays more.
E) no one pays the tax because the wheat must be harvested or it will go to waste.
Correct Answer:
Verified
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