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Economics (AS & A Level) · Oct / Nov 2024 · Paper 11 · Question 13

9708Methods and effects of government intervention in markets

A specific tax is imposed on a product for which the elasticity of supply is zero. Which statement is correct?

  1. AThe burden of this tax will fall entirely on consumers.
  2. BThe burden of this tax will fall entirely on suppliers.
  3. CThe burden of this tax will fall mainly on consumers.
  4. DThe burden of this tax will fall mainly on suppliers.

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Correct answer: B. The burden of this tax will fall entirely on suppliers.

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