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Suppose That There Is a Tax of $5 Per Unit

Question 23

Multiple Choice

Suppose that there is a tax of $5 per unit, and the demand curveis more elastic than the supply curve. Which of the followingstatements could be true? A) Buyers pay $3 of the tax. B) Buyers pay $1 of the tax. C) Sellers pay $1 of the tax. D) Sellers pay all of the tax. Suppose that there is a tax of $5 per unit, and the demand curveis more elastic than the supply curve. Which of the followingstatements could be true?


A) Buyers pay $3 of the tax.
B) Buyers pay $1 of the tax.
C) Sellers pay $1 of the tax.
D) Sellers pay all of the tax.

Correct Answer:

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