The burden of a government tax on a commodity whose demand is inelastic will

Assessment: JAMB UTME - Economics - 2006 Subject: Economics

Question 1 Report

The burden of a government tax on a commodity whose demand is inelastic will
Answer Details
When the demand for a commodity is inelastic, it means that a change in price does not significantly affect the quantity demanded by consumers. Therefore, if a government imposes a tax on such a commodity, the burden of the tax will mostly be passed on to the consumers in the form of higher prices, and not much by the producers who will still produce the same quantity since the demand hasn't really changed much. So, the correct option is: "fall more heavily on consumers".

Download The App On Google Playstore

Everything you need to excel in your exams

Green Bridge CBT Mobile App
Personalized AI Learning Chat Assistant
200,000+ Exam Questions Across IGCSE, JAMB, WAEC & NECO
Over 3,900 Lesson Notes
Offline Support - Learn Anytime, Anywhere
Green Bridge Timetable
Literature Summaries & Potential Questions
Track Your Performance & Progress
In-depth Explanations for Comprehensive Learning