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Suppose the Demand for Barley Is Perfectly Elastic

Question 129

Multiple Choice

Suppose the demand for barley is perfectly elastic.The supply curve of barley is upward sloping.If a tax is imposed on barley,


A) barley sellers pay the entire tax.
B) barley buyers pay the entire tax.
C) the government pays the entire tax.
D) the tax is split evenly between barley buyers and sellers.
E) who pays the tax depends on whether the government imposes the tax on barley sellers or on barley buyers.

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