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Moderate

Incidence of Tax: Full Burden of Tax on Buyers

APMICR-HIQXIB

In which of the following situations would the buyer pay the full amount of a per-unit excise tax?

A

Demand is relatively elastic, and supply is relatively elastic.

B

Demand is perfectly elastic, and supply is relatively inelastic.

C

Demand is relatively inelastic, and supply is relatively elastic.

D

Demand is perfectly inelastic, and supply is relatively elastic.

E

Demand is relatively elastic, and supply is relatively inelastic.