Assume that the supply of gasoline is relatively inelastic and the supply of wheat is relatively elastic.If a tax is levied on both goods,what happens to the quantity of gasoline produced as compared to the quantity of wheat produced

Question

Quizplus · Accepted Answer

When supply is inelastic, producers cannot easily reduce the quantity supplied in response to a tax, so the quantity of gasoline produced declines less than the quantity of wheat, which has a more elastic supply and can adjust more easily.

Assume That the Supply of Gasoline Is Relatively Inelastic and the Supply