Suppose the demand curve is perfectly inelastic and the supply curve is upward sloping. The price sellers receive after a specific tax is imposed on sellers
A) is less than before the tax.
B) is higher than before the tax.
C) is unchanged.
D) depends on the supply elasticity.
C
You might also like to view...
When the government sets a price floor which is below the equilibrium price
A. a price ceiling will follow. B. a shortage will develop. C. a surplus will develop. D. the equilibrium price will be maintained.
Define the term normal good. How can a normal good be recognized from
(i) the Engel curve diagram, (ii) the income elasticity of demand, and (iii) the substitution and income effects of a price change?
The following are common errors students make when discussing supply and demand. What is the mistake in each? a. At equilibrium, demand equals supply. b. The quantity of demand is greater than the quantity of supply. c. They move along the line from both ends to an equilibrium in the middle. d. The increase in demand causes an increase in supply.
What will be an ideal response?
What are the tools that a country can use to restrict international trade?
What will be an ideal response?