If the demand for a commodity is perfectly elastic, the incidence of a tax on that commodity will be, other things being equal, entirely on the?

By: |Published on: Jan 7|Categories: Economics WAEC| 0 comments

A. buyer
B. seller
C. government
D. local authority

Correct Answer: Option B

B. seller

Explanation

The seller or producer will bear the whole burden of taxation. Any attempt to increase price will make the demand for the commodity to fall to zero.

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