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Phoenix [80]
4 years ago
11

When a good with a perfectly inelastic demand is taxed, the incidence of the tax is borne:

Business
1 answer:
velikii [3]4 years ago
4 0

Answer:

Option (C) is correct.

Explanation:

The goods with a perfectly inelastic demand with any changes in the prices of the commodities are generally have no effect on the demand for a good. This means that if there is an imposition of tax on the good with a perfectly inelastic demand then this will lead to increase the price level by the full amount and therefore, the incidence of this tax is fully borne by the consumers.

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