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masha68 [24]
3 years ago
12

The demand for gasoline is inelastic and the supply of gasoline in the winter is elastic. Therefore,

Business
1 answer:
MakcuM [25]3 years ago
3 0

Answer:

B. buyers bear most of the incidence of the tax.

Explanation:

If demand is inelastic, quantity demanded is insensitive to changes in price.

If supply is elastic, a small change in price has a great effect on quantity supplied. Quantity supplied is sensitive to changes in price.

If a tax is imposed on gasoline, the incidence (who pays for the tax) can be beqred by the consumers because they have an inelastic demand. If the price of gasoline rises , the quantity demanded doesn't change.

If the tax incidence was borne by the suppliers, the quantity supplied would drop.

I hope my answer helps you.

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