The Price Elasticity of Demand for Rice Is 2, and the Price

Multiple Choice

The price elasticity of demand for rice is 2, and the price elasticity of supply of rice is 1.2. What happens if a tax is placed on this good?

A) The quantity of rice demanded will fall to zero.
B) Buyers and sellers will share the tax burden equally.
C) Sellers will have a higher tax incidence than buyers have.
D) Buyers will have a higher tax incidence than sellers have.