If the demand for a good is highly elastic, then imposing an excise tax on that...
If the demand for a good is highly elastic, then imposing an excise tax on that good will
A. mostly burden consumers.
B. result in a large increase in quantity
C. mostly burden producers
D. lead to a minor decrease in price.
Homework Answers
Answer
C most burden on producers
As the demand is highly elastic it means that consumers are very price sensitive so if price increases the quantity demanded will lower at a a huge magnitude. This is the reason why the producers will be more willing to take the burden of the tax.
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If the demand for a good is highly elastic, then imposing an
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