If elasticity of demand is 1.8, elasticity of supply is 0.2, and a 20 percent excise tax is levied on the good:
A) consumers pay 20 percent of the tax.
B) sellers pay 20 percent of the tax.
C) consumers pay 10 percent of the tax.
D) sellers pay 10 percent of the tax.

Question

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The Answer of If elasticity of demand is 1.8, elasticity of supply is 0.2, and a 20 percent excise tax is levied on the good:
A) consumers pay 20 percent of the tax.
B) sellers pay 20 percent of the tax.
C) consumers pay 10 percent of the tax.
D) sellers pay 10 percent of the tax.

If Elasticity of Demand Is 1