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In a Market Where Supply and Demand Are Equally Elastic,producers

Question 117

Multiple Choice

In a market where supply and demand are equally elastic,producers and consumers will share equally the burden of a tax because


A) producers will simply raise the price of their output in response to the tax.
B) consumers will buy less of the good in question once the tax is imposed.
C) the tax is more likely to be paid out of pocket by producers.
D) the government doesn't care who pays the tax as long as the revenue is collected.
E) both have equal ability to change their behavior in response to the tax.

Correct Answer:

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