If the supply of capital is perfectly ________ end up paying the tax on capital income.

Name: If the supply of capital is perfectly ________ end up paying the tax on capital income.
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Question

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When the supply of capital is perfectly elastic, firms that demand capital end up paying the tax on capital income because the supply curve is horizontal, indicating that suppliers (lenders) can easily move their capital to different markets in response to taxes, leaving firms to bear the cost.

If the Supply of Capital Is Perfectly ________ End Up