The supply curve for a product has infinite elasticity. An excise tax is levied on the product. The likely effect will be to

A) reduce the amount the producer receives for each unit sold by the amount of the tax.
B) increase the price the consumer pays per unit by the amount of the tax.
C) increase the price to consumers by an amount less than the tax.
D) increase the amount received by producers by less than the tax.

Infinite Elasticity

A theoretical situation where the quantity demanded or supplied of a product responds infinitely to changes in price; essentially, the smallest price change can lead to an unlimited demand or supply.

Excise Tax

A tax charged on specific goods and services, such as gasoline, tobacco, and alcohol.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied, typically upward sloping.