Perfectly elastic demand but only somewhat elastic supply

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Reference no: EM131094708

What would happen if sellers must begin paying a tax on some good that has perfectly elastic demand but only somewhat elastic supply?

The total cost to consumers would remain the same, so sellers would bear the entire burden of the tax.

The total cost to consumers would increase by less than the full amount of the tax, so buyers and sellers both would bear some of the tax burden.

The total cost to consumers would increase by the full amount of the tax, so buyers would bear the entire burden of the tax.

The total cost to consumers would increase by more than the amount of the tax, so buyers would bear the full tax burden and transfer more to sellers.

Reference no: EM131094708

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