A tax on sellers would not cause a decrease in quantity sold if:
A)supply is inelastic.
B)there are few competing products.
C)demand is perfectly inelastic.
D)demand is perfectly elastic.

Question

Quizplus · Accepted Answer

When demand is perfectly inelastic, consumers are willing to buy the same quantity regardless of the price. Therefore, a tax on sellers, which might increase the price for consumers, would not reduce the quantity sold because consumers' purchase decisions are not sensitive to price changes in this scenario.

A Tax on Sellers Would Not Cause a Decrease in Quantity