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Suppose supply is perfectly inelastic, while demand is relatively elastic. A tax of $1.00 is levied on the purchasers of the good. Which of the
Suppose supply is perfectly inelastic, while demand is relatively elastic. A tax of $1.00 is levied on the purchasers of the good. Which of the following statements is correct?
a) the government will fail to raise any tax revenue
b) there will be a positive deadweight loss
c) there will be no deadweight loss
d) governmwnt revenue will be less than the deadweight loss of the tax
answer is c, but I can't understand why the answer is C.
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