The Price Elasticity of Supply of Lamps Is 1, and the Price

Multiple Choice

The price elasticity of supply of lamps is 1, and the price elasticity of demand for lamps is 1.5. What happens if a sales tax is placed on buyers of lamps?

A) The entire burden of the tax falls on the buyers.
B) The incidence of the tax falls more heavily on the buyers.
C) Buyers pay the entire burden of the tax.
D) Sellers have a higher tax incidence than buyers.