A tax is imposed on orange juice. Consumers will bear no burden from this tax if the:
A)demand for orange juice is perfectly inelastic.
B)supply curve for orange juice is unit elastic.
C)demand for orange juice is unit elastic.
D)supply curve for orange juice is perfectly inelastic.

Question

A tax is imposed on orange juice. Consumers will bear no burden from this tax if the:
A)​demand for orange juice is perfectly inelastic.
B)​supply curve for orange juice is unit elastic.
C)​demand for orange juice is unit elastic.
D)​supply curve for orange juice is perfectly inelastic.

Quizplus · Accepted Answer

If the supply curve for orange juice is perfectly inelastic, it means that the quantity supplied will not change in response to the tax. Therefore, the price will increase by the full amount of the tax and the burden will be entirely born by producers, not consumers.

A Tax Is Imposed on Orange Juice