Regulatory costs are partially borne by workers when demand
Regulatory costs are partially borne by workers when:
demand is perfectly inelastic.
supply is perfectly elastic.
supply is perfectly inelastic.
none of these.
| A. | demand is perfectly inelastic. | |
| B. | supply is perfectly elastic. | |
| C. | supply is perfectly inelastic. | |
| D. | none of these. |
Solution
C.
supply is perfectly inelastic.
because in that case supply will not change so in order to maintain demand at same level , this extra cost of regulation is beared by workers partially.
