If the demand for a good is perfectly elastic,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

When the demand for a good is perfectly elastic, the slightest increase in price will cause the quantity demanded to drop to zero. In this case, the burden of the tax will fall entirely on the supplier because they will not be able to pass the added cost onto consumers in the form of higher prices, as they will simply switch to a cheaper alternative. Therefore, the entire burden of the tax falls on the sellers.

If the Demand for a Good Is Perfectly Elastic,then a Tax