ECONOMICS
CONSUMERS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -If demand is relatively inelastic and supply is relatively elastic, then consumers bear more of the burden of a tax. If supply is perfectly inelastic, then producers bear none of the burden of a tax, no matter what the value of own-price elasticity of demand.
Detailed explanation-2: -If demand is more inelastic than supply, consumers bear most of the tax burden. But, if supply is more inelastic than demand, sellers bear most of the tax burden.
Detailed explanation-3: -Inelastic demand means that when the price of a good or service goes up, consumers’ buying habits stay about the same, and when the price goes down, consumers’ buying habits also remain unchanged.
Detailed explanation-4: -If demand is more inelastic than supply, consumers bear most of the tax burden, and if supply is more inelastic than demand, sellers bear most of the tax burden.
Detailed explanation-5: -Inelastic demand in economics occurs when the demand for a product doesn’t change as much as the price. A steep demand curve graphically represents inelastic demand. The steeper the curve, the more inelastic the demand for that product or service is.