which-of-the-following-statements-is-true-regarding-tax-incidence-when-demand-is

Question

Which of the following statements is true regarding tax incidence when demand is perfectly elastic?

Accepted Answer

Producers bear the entire burden of the tax.

Answer

Consumers bear the entire burden of the tax.

Answer

The tax burden is shared equally between consumers and producers.

Answer

The tax has no effect on the market.