A per-unit tax is placed on the production of good Y. Someone who believes that the producers of the good will end up paying the full tax may be assuming that the good's demand curve is
A)elastic.
B)perfectly inelastic.
C)inelastic.
D)perfectly elastic.
E)unit elastic.

Question

Quizplus · Accepted Answer

If the demand curve is perfectly elastic, consumers will not tolerate any price increase, forcing producers to absorb the full tax.

A Per-Unit Tax Is Placed on the Production of Good