If a tax is imposed upon the use of an inelastically supplied input with no alternate uses, then you should expect the price of the product to increase dramatically.

Question

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When a tax is imposed on an inelastically supplied input with no alternate uses, the supply curve is relatively vertical (inelastic), meaning suppliers cannot easily change the quantity supplied in response to the tax. The burden of the tax is more likely to be shared between producers and consumers, rather than leading to a dramatic increase in the product price. The price increase might not be dramatic because the suppliers cannot easily reduce their production, and thus, both parties will absorb some of the tax burden.

If a Tax Is Imposed Upon the Use of an Inelastically