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WAEC Economics 2022 Question 41

Question 41

Public Finance

If demand is perfectly inelastic, a tax imposed

  1. A.is borne only by the producer
  2. B.is borne only by the consumer
  3. C.will have greater impact on the seller
  4. D.will have no impact on the buyer
Show the answer and explanation

Answer: B (is borne only by the consumer)

Explanation

Buyers purchase the same amount whatever the price, so the whole tax is passed on to them.