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WAEC Economics 2002 Question 41

Question 41

Public Finance

The incidence of an increase in tax on a commodity with perfectly inelastic demand will be on the

  1. A.wholesaler.
  2. B.retailer
  3. C.government.
  4. D.consumer
Show the answer and explanation

Answer: D (consumer)

Explanation

Buyers keep buying the same amount at any price, so the whole tax is passed on to the consumer.