WAEC Economics 2022 Objective — Question 41

Question 41 of 50 from the West African Examinations Council (WAEC) Economics 2022 Objective paper, with the correct answer and a full explanation.

If demand is perfectly inelastic, a tax imposed

A. is borne only by the producer
B. is borne only by the consumerCorrect
C. will have greater impact on the seller
D. will have no impact on the buyer

Explanation

When demand is perfectly inelastic, quantity demanded does not change with price, so the producer can pass the entire tax burden onto the consumer — the tax is borne only by the consumer.

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