When policy makers are deciding where to place the statutory incidence of a tax, it is helpful to remember that:
A. it will have no effect on the economic incidence of the tax.
B. the economic incidence will fall to the more-elastic party.
C. it will largely determine the economic incidence of the tax.
D. it will have a large impact on efficiency of the tax.
A. it will have no effect on the economic incidence of the tax.
You might also like to view...
In the figure above, when the market is unregulated and in equilibrium, marginal social cost ________ marginal benefit, and the quantity of chemical produced is ________
A) exceeds; above the efficient quantity B) exceeds; below the efficient quantity C) is below; above the efficient quantity D) is below; below the efficient quantity E) equals; efficient
If a marginal cost pricing rule is imposed on the firm in the figure above, the deadweight loss will be
A) zero. B) $100. C) $200. D) $50.