Multiple Choice
The price elasticity of demand for a good is 0.5, and the price elasticity of supply is 3. What happens if a $10 per unit tax is placed on buyers of this good?
A) Sellers will have a larger tax incidence than buyers have.
B) Sellers will have a smaller tax incidence than buyers have.
C) The buyers' tax incidence is greater than $10.
D) The buyers' tax incidence is $10.
Correct Answer:
Verified
Correct Answer:
Verified
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