Categories: Economics WAEC

If demand is perfectly inelastic; a tax imposed?

A. is borne only by the producer
B. is borne only by the consumer
C. will have a greater impact on the seller
D. will have no impact on the buyer

Correct Answer:

Option B = is borne only by the consumer

Explanation

The incidence of tax when demand is perfectly inelastic is borne by the consumer.

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