Question

suppose that a $0.75 tax is placed on gasoline. under what circumstances will gasoline sellers end up shouldering the full burden of the tax?

Answer 1

The Answer is "if supply is upward-sloping and demand is perfectly elastic".

What is Tax?

Taxes are obligatory contributions levied on businesses or individuals through a central authority entity—whether or not local, regional, or national. Tax sales finance authorities activities, which include public works and offerings together with faculties and roads, or packages together with Medicare and Social Security.

I suppose the question is :

Suppose that a $0.75 tax is located on fuel. Under what situations will fuel dealers come to be shouldering the overall burden of the tax?

• If deliver(supply) is flawlessly inelastic and call for is downward-sloping.
• If call for is flawlessly inelastic and deliver is upward-sloping.
• if supply is upward-sloping and demand is perfectly elastic.
• The customer and the vendor continually proportion the weight of the tax.

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