Australia exports cattle to Indonesia.If Australia puts an export subsidy on cattle and the Australian supply of cattle is elastic while the demand for cattle in Indonesia is inelastic then:
A) Australian sellers of cattle will enjoy most of the subsidy's benefit
B) Indonesian buyers of cattle will enjoy most of the subsidy's benefit
C) the benefit of the subsidy will be shared equally
D) it is impossible to determine how the burden of the tax will be shared
Correct Answer:
Verified
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