A perunit tax is imposed on consumers in the market for ball

A per-unit tax is imposed on consumers in the market for balloons. The burden of this tax will fall entirely on producers if: Demand is perfectly elastic. Supply is perfectly inelastic. Both (a) and (b) are true. Neither (a) nor (b) is true.

Solution

The correct answer should be B. If supply is perfectly inelastic then the entire burden of the tax falls on the producers. The correct answer should be B