Multiple Choice
The price elasticity of demand is 0.2, and the price elasticity of supply is 1.2. What happens if a $1 per unit tax is placed on sellers of this good?
A) The sellers' tax incidence is $1.
B) Sellers will have a larger tax incidence than buyers.
C) Sellers will have a smaller tax incidence than buyers.
D) The buyers' tax incidence is greater than $1.
Correct Answer:
Verified
Correct Answer:
Verified
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