Homework SourseThe burden of a percentage sales tax will fall primarily on
The burden of a percentage sales tax will fall primarily on business when:
The burden of a percentage sales tax will fall primarily on business when:
demand is highly elastic with respect to price.
demand is highly inelastic with respect to price.
the elasticity of demand equals 1.
| A. | The burden of a percentage sales tax will fall primarily on business when: | |
| B. | demand is highly elastic with respect to price. | |
| C. | demand is highly inelastic with respect to price. | |
| D. | the elasticity of demand equals 1. |
Solution
Burden of sales tax falls primarily on the business (the seller) when demand is highly elastic.
Correct option (B)
