A tax on the income from land or other resource with a perfectly inelastic supply

Question

Quizplus · Accepted Answer

A tax on the income from land or other resource with a perfectly inelastic supply has no effect on the quantity supplied because the supply is completely inelastic, so choice A is correct. Since there is no change in quantity, there is no deadweight loss, so choice B is also correct. The entire tax burden falls on the owner, as they cannot pass on the tax to consumers through higher prices because the supply of the resource is completely inelastic, making choice C also correct. Therefore, choices A, B, and C are all correct, making E the best choice.

A Tax on the Income from Land or Other Resource