Question 46
Public FinanceThe burden of tax on a commodity whose demand is infinitely inelastic
- A.is zero
- B.will be borne by seller alone
- C.will be borne by buyer alone
- D.will be borne by both seller and buyer
- E.is impossible to tell who bears it.
Show the answer and explanation
Answer: C (will be borne by buyer alone)
Explanation
If buyers will purchase the same quantity at any price, the seller can pass the whole tax on to them.