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

Question

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

Quizplus · Accepted Answer

If the demand for wine is perfectly inelastic, it means that consumers will still purchase the same quantity of wine, even with an increase in price due to the tax. In this case, the entire burden of the tax will be borne by the consumers, and the sellers will not be affected.

A Tax Is Imposed on Wine