Multiple Choice
Use the figure A Tax on the Demand for a Good) . If we know that the price elasticity of demand is larger than the price elasticity of supply, what is true?
Figure: A Tax on the Demand for a Good
A) The size of area A is larger than the size of area B.
B) The size of area A is smaller than the size of area B.
C) Area A and area B are the same size.
D) The buyer of this good pays the entire tax incidence because it is being taxed.
Correct Answer:

Verified
Correct Answer:
Verified
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