In which of the following conditions, the whole incidence of tax lies on the sellers?
By Dalton's tax incidence formula \(\frac{\text{Incidence on Buyers}}{\text{Incidence on Sellers}} = \frac{e_s}{e_d}\), the entire incidence of a tax falls on the sellers…
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In which of the following conditions, the whole incidence of tax lies on the sellers?
Answer and explanation
Correct answer A
By Dalton's tax incidence formula , the entire incidence of a tax falls on the sellers (zero shifting to buyers) when demand is perfectly elastic () and/or supply is perfectly inelastic ().
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RPSC Assistant Professor (College Education)