If the supply of a good is perfectly inelastic, then suppliers will bear the full burden of an excise tax
A)no matter how elastic the demand for the good is.
B)only if demand is perfectly elastic.
C)only if demand is perfectly inelastic.
D)only if the government forbids them to raise the price of the good.

Question

Quizplus · Accepted Answer

When the supply of a good is perfectly inelastic, it means that suppliers cannot adjust the quantity supplied in response to price changes. Therefore, they will bear the full burden of an excise tax regardless of the elasticity of demand, as they cannot alter supply to mitigate the tax's impact.

If the Supply of a Good Is Perfectly Inelastic, Then