The only way price and quantity will not change when a tax is assessed on producers is for
A)demand to be perfectly inelastic.
B)supply to be perfectly elastic and demand to be perfectly inelastic.
C)supply to be perfectly elastic.
D)supply to be perfectly inelastic.
E)demand to be perfectly elastic.

Question

Quizplus · Accepted Answer

When supply is perfectly inelastic, producers are not able to adjust their production in response to a tax, so the tax burden falls entirely on the consumers in the form of higher prices, and quantity demanded remains the same.

The Only Way Price and Quantity Will Not Change When