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.Management Sciences
Category: Taxation
Refer to Exhibit 4. If a tax is placed on the product in this market, producer surplus is the area?
A. A + B + E
B. A + B + C + D
C. A
D. D
Refer to Exhibit 4. Which of the following is true with regard to the burden of the tax in Exhibit 4 ?
A. The buyers pay a larger portion of the tax because demand is more inelastic than supply
B. The sellers pay a larger portion of the tax because supply is more elastic than demand
C. The buyers pay a larger portion of the tax because demand is more elastic then supply
D. The sellers pay a larger portion of the tax because supply is more inelastic than demand
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