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On Green Island, the Demand for Pencils Is Perfectly Elastic

Question 34

Multiple Choice

On Green Island, the demand for pencils is perfectly elastic and the supply of pencils is perfectly inelastic. If a sales tax on pencils is introduced


A) the tax is split evenly between the buyers and sellers.
B) the buyers pay the entire tax.
C) no one pays the tax.
D) the sellers pay the entire tax.

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