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Suppose an excise (or per-unit) tax was put on a specific good and the seller had to send a certain amount of money for each
Suppose an excise (or per-unit) tax was put on a specific good and the seller had to send a certain amount of money for each unit sold to the government. Which of the following situations would lead to the greatest increase in the market price?
A. Demand and supply are both relatively elastic.
B. Demand and supply are both perfectly elastic.
C. Demand is relatively elastic and supply is relatively inelastic.
D. Demand is relatively inelastic and supply is relatively elastic.
E. Demand and supply are both relatively inelastic.
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