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Suppose the Demand for Pizza Is Inelastic and the Supply

Question 81

Multiple Choice

Suppose the demand for pizza is inelastic and the supply of pizza is elastic, and the demand for cigarettes is inelastic and the supply of cigarettes is elastic. If a tax were levied on the sellers of both of these commodities, we would expect that the burden of:


A) the pizza tax would fall more heavily on sellers than on buyers, and the burden of the cigarette tax would fall more heavily on buyers than on sellers.
B) the pizza tax would fall more heavily on buyers than on sellers, and the burden of the cigarette tax would fall more heavily on sellers than on buyers.
C) both the pizza and the cigarette taxes would fall more heavily on buyers than on sellers.
D) both the pizza and the cigarette taxes would fall more heavily on sellers than on buyers.

Correct Answer:

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