Question

The burden of a tax is mainly borne by the buyer if:
a. the demand for the good is relatively price elastic.
b. the supply of the good is relatively price elastic.
c. the demand for the good is perfectly price elastic.
d. the demand for the good is relatively price inelastic.
e. the supply of the good is perfectly price elastic.

Answer 1

As sales tax causes the supply curve to shift inward, it has a secondary effect on the equilibrium price for a product. Equilibrium price is the price at which the producer's supply matches consumer demand at a stable price. Since sales tax increases the price of goods, it causes the equilibrium price to fall.

Answer 2

Price elasticity of demand is a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price elasticity of demand is a term in economics often used when discussing price sensitivity.

Answer 3

so what would make the tax seem higher

Answer 4

i cant give you the answer i can bring you really close you can rule out any possitive answers that would make the price go down

Answer 5

haha I know, but I think it is (B)

Answer 6

b. the supply of the good is relatively price elastic.
this would mean the supply is flowing up and down in price due to it now being perfectly elastic perfectly elastic means that the demand for the item meets the supply

Answer 7

you are close

Answer 8

then (E)

Answer 9

yess

Answer 10

Thank you! this really helped :]

Answer 11

you are welcome fan me for more