If the demand for a product is perfectly elastic and supply is upsloping,a $1 excise tax per unit on suppliers will:

Question

Quizplus · Accepted Answer

Since the demand for the product is perfectly elastic, consumers are extremely sensitive to any changes in price. As a result, suppliers cannot raise the price to pass the tax onto consumers. Therefore, they will have to absorb the entire tax and the price will not increase.

If the Demand for a Product Is Perfectly Elastic and Supply