In the market for tomatoes, assume the market demand is perfectly inelastic and the market supply is inelastic. If a tax is placed on the suppliers in this market, how will the tax burden be distributed?
a. Consumers will bear a greater burden of the tax, but not all the tax.
b. Consumers and producers will bear the tax burden equally
c. Producers will bear all the tax Consumers will bear all the tax
d. Producers will bear a greater burden of the tax, but not all of the tax.
Answers: 3
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