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When Companies and Newscasters Say That Any Additional Excise Tax

Question 67

Multiple Choice

When companies and newscasters say that any additional excise tax will just be "passed on to the consumer," they are correct only if


A) the quantity demanded is completely insensitive to the price.
B) the amount of the tax is relatively small.
C) producers do not want to absorb any of the tax themselves.
D) the government allows firms to do that.
E) the tax reduces the equilibrium quantity of the good.

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