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The demand for a good for which there is a per-unit tax becomes less elastic, ceteris paribus. What would be the impact of the change
The demand for a good for which there is a per-unit tax becomes less elastic, ceteris paribus. What would be the impact of the change in elasticity of demand?
The government will decrease the value of the tax.
The government will collect less tax revenue.
Producers will pay a greater portion of the tax than before.
Consumers will pay a greater portion of the tax than before.
There will be no change in tax incidence.
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