If the supply curve is perfectly inelastic and the demand curve is a d
If the supply curve is perfectly inelastic and the demand curve is a downward sloping straight line, what is the effect of a consumer ad valorem tax on equilibrium price and quantity?
A) Price remains unchanged and quantity increases.
B) Price decreases and quantity increases.
C) Price decreases and quantity remains unchanged.
D) Price and quantity decrease.
ANSWER
C
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