When a Tax Is Imposed on a Good for Which

Multiple Choice

When a tax is imposed on a good for which the demand is relatively elastic and the supply is relatively inelastic,

A) buyers of the good will bear most of the burden of the tax.
B) sellers of the good will bear most of the burden of the tax.
C) buyers and sellers will each bear 50 percent of the burden of the tax.
D) the effective price paid by buyers will decrease as a result of the tax.