If an Excise Tax Is Placed on a Product That

Multiple Choice

If an excise tax is placed on a product that has a price elasticity of demand equal to zero, then the

A) entire tax will be paid by the consumer
B) entire tax will be paid by the producer
C) consumer and producer will each pay a share of the tax
D) incidence of the tax cannot be determined unless we know the coefficient of price elasticity of supply
E) tax is progressive