The burden of a specific sales tax falls entirely on the consumer when the

Name: The burden of a specific sales tax falls entirely on the consumer when the
Brand: Quizplus
Rating: 5.0 (45 reviews)

Question

Quizplus · Accepted Answer

When the price elasticity of demand is zero, it means that consumers have no option but to purchase the good or service at the given price. In this case, any increase in price due to the sales tax will be entirely borne by the consumer since they cannot opt-out of the purchase. Thus, the burden falls entirely on the consumer.

The Burden of a Specific Sales Tax Falls Entirely on the Consumer