Suppose a tax is imposed on baseball bats.In which of the following cases will the tax cause the equilibrium quantity of baseball bats to shrink by the smallest amount?
A)The response of buyers to a change in the price of baseball bats is strong,and the response of sellers to a change in the price of baseball bats is weak.
B)The response of sellers to a change in the price of baseball bats is strong,and the response of buyers to a change in the price of baseball bats is weak.
C)The response of buyers and sellers to a change in the price of baseball bats is strong.
D)The response of buyers and sellers to a change in the price of baseball bats is weak.

Question

Quizplus · Accepted Answer

When both buyers and sellers have a weak response to price changes, the quantity demanded and supplied changes little, minimizing the reduction in equilibrium quantity.

Suppose a Tax Is Imposed on Baseball Bats