JAMB - Economics (1979 - No. 44)
The burden of tax on a commodity whose demand is infinitely inelastic
is zero
will be borne by the seller alone
will be borne by the buyer alone
will be borne by both buyer and seller
is impossible to tell who bears it
Explicació
In cases where demand is infinitely inelastic, consumers will buy the same quantity of the good regardless of price increases. This means that if a tax is imposed, sellers can pass the entire tax burden onto consumers, as they have no alternative but to buy the product at any price. Consequently, the buyers are the only ones who bear the cost of the tax.