In a market where the demand curve is totally inelastic, if the government imposes an excise tax, the tax burden will entirely rest on the consumer and the deadweight loss will be equal to zero.
Information on excise tax
An excise tax is a controlled tax on certain goods or services, such as alcohol, cigarettes, and gasoline. Corporations are the main payers of excise taxes. Many of them are supported by commercial entities, who then charge consumers extra as a result.
Excise taxes are national taxes applied within a government infrastructure, as opposed to being imposed internationally across national borders.
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