As part of an anti-obesity program,the government levies an excise tax on high-fat foods.We expect consumers to pay almost all of this tax if demand is _ and supply is _.

A) inelastic;inelastic
B) inelastic;elastic
C) elastic;elastic
D) elastic;inelastic

Question

As part of an anti-obesity program,the government levies an excise tax on high-fat foods.We expect consumers to pay almost all of this tax if demand is _____ and supply is _____.

A) inelastic;inelastic
B) inelastic;elastic
C) elastic;elastic
D) elastic;inelastic

Tyler Jakse · Accepted Answer

Final Answer : B, Explanation :  When demand is inelastic, consumers are less sensitive to price changes and will continue to buy the product despite price increases, such as those caused by a tax. When supply is elastic, producers can more easily change their production levels and are less likely to absorb the cost of the tax, passing it on to consumers instead.

As part of an anti-obesity program,the government levies an excise tax on high-fat foods.We expect consumers to pay almost all of this tax if demand is _ and supply is _.

A) inelastic;inelastic
B) inelastic;elastic
C) elastic;elastic
D) elastic;inelastic

Definitions

Learning Objectives

Learning Objectives

Related questions

As part of an anti-obesity program,the government levies an excise tax on high-fat foods.We expect consumers to pay almost all of this tax if demand is _____ and supply is _____.A) inelastic;inelasticB) inelastic;elasticC) elastic;elasticD) elastic;inelastic

Definitions

Learning Objectives

Learning Objectives

Related questions

As part of an anti-obesity program,the government levies an excise tax on high-fat foods.We expect consumers to pay almost all of this tax if demand is _ and supply is _.

A) inelastic;inelastic
B) inelastic;elastic
C) elastic;elastic
D) elastic;inelastic