Only in the case of perfectly inelastic demand will consumers pay the full amount of a specific tax or ad valorem tax.

Question

Quizplus · Accepted Answer

While it is true that consumers pay the full tax in the case of perfectly inelastic demand,it is not the only case.Regardless of demand elasticity (except in the rare case where demand is also perfectly elastic),consumers will pay the full amount of the tax if supply is perfectly elastic.

Only in the Case of Perfectly Inelastic Demand Will Consumers