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Questions and Answers
Who bears the incidence of an excise tax in a competitive market with perfectly inelastic demand?
Who bears the incidence of an excise tax in a competitive market with perfectly inelastic demand?
- Producers
- Investors
- Consumers (correct)
- Government
What happens to the incidence of an excise tax in a competitive market with perfectly elastic demand?
What happens to the incidence of an excise tax in a competitive market with perfectly elastic demand?
- Producers bear the tax (correct)
- Government bears the tax
- Consumers bear the tax
- Investors bear the tax
What is the impact of a competitive market with perfectly inelastic demand on the incidence of an excise tax?
What is the impact of a competitive market with perfectly inelastic demand on the incidence of an excise tax?
- Government bears the tax
- Producers bear the tax
- Investors bear the tax
- Consumers bear the tax (correct)
