If the supply of a good is perfectly inelastic,then a tax on the good will be paid
A)completely by the buyers.
B)completely by the sellers.
C)equally by the buyers and sellers.
D)mostly but not completely by the buyers.
E)mostly but not completely by the sellers.

Question

Quizplus · Accepted Answer

If the supply of a good is perfectly inelastic, it means that the quantity supplied will not change no matter the change in price. Therefore, the sellers will not increase their price to pass on the tax burden to the buyers. As a result, the entire tax burden will be borne by the sellers of the good. Hence, the correct answer is B - completely by the sellers.

If the Supply of a Good Is Perfectly Inelastic,then a Tax