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1.8 The market mechanism, market failure and government intervention in markets

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Question 21

Assuming the price elasticity of demand for a product is perfectly elastic, any unit tax placed on the product will

shift the demand curve to the right.

be borne entirely by the consumer.

leave the price paid by consumers unchanged.

result in the producer bearing none of the tax burden.

1.8 The market mechanism, market failure and government intervention in markets Questions

  1. A Level
  2. /Economics
  3. /1.8 The market mechanism, market failure and government intervention in markets