If the demand curve for pet prescription medicine is vertical, the economic burden of an excise tax on pet medicines would be borne
A) evenly by consumers and producers
B) mostly by producers
C) entirely by consumers
D) entirely by producers

Question

Quizplus · Accepted Answer

When the demand curve is vertical, it indicates that the quantity demanded does not change regardless of the price. This means consumers are perfectly inelastic to price changes. Therefore, in the case of an excise tax on pet medicines, the economic burden would be entirely borne by consumers, as they would still purchase the same quantity despite any price increase.

If the Demand Curve for Pet Prescription Medicine Is Vertical