Multiple Choice
Which of the following is true if a $2 per unit tax is levied on sellers of a good?
A) Buyers bear the brunt of the tax if the elasticity of demand is - 1.3 and the elasticity of supply is .6.
B) The price consumers pay will increase by $2 if the elasticity of demand is 0.
C) Buyers bear the brunt of the tax if the elasticity of demand is - .3 and the elasticity of supply is 1.6.
D) Dead weight loss will be smaller the more elastic demand.
Correct Answer:

Verified
Correct Answer:
Verified
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