Reference: Ref 6-4 Suppose that there is a tax of $5 per unit, and the demand curve is more elastic than the supply curve. Which of the following statements could be true?
A) Buyers pay $3 of the tax.
B) Buyers pay $1 of the tax.
C) Sellers pay $1 of the tax.
D) Sellers pay all of the tax.

Question

Reference: Ref 6-4 Suppose that there is a tax of $5 per unit, and the demand curve is more elastic than the supply curve. Which of the following statements could be true?
A) Buyers pay $3 of the tax. 
B) Buyers pay $1 of the tax. 
C) Sellers pay $1 of the tax. 
D) Sellers pay all of the tax.

Quizplus · Accepted Answer

The Answer of  Reference: Ref 6-4 Suppose that there is a tax of $5 per unit, and the demand curve is more elastic than the supply curve. Which of the following statements could be true?
A) Buyers pay $3 of the tax. 
B) Buyers pay $1 of the tax. 
C) Sellers pay $1 of the tax. 
D) Sellers pay all of the tax.

Reference: Ref 6-4 Suppose That There Is a Tax of $5