A tax on the income from land or other resource with a perfectly inelastic supply

Question

Quizplus · Accepted Answer

A tax on a resource with perfectly inelastic supply does not affect the quantity supplied, as the quantity is fixed regardless of the tax. Therefore, the tax is paid entirely by the owner (since they cannot pass it on through higher prices due to the fixed supply), does not decrease the equilibrium quantity, and results in no deadweight loss, making all three statements correct.

A Tax on the Income from Land or Other Resource