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Question
The elasticities of supply and demand are important in determining the distribution of tax burden because they
a. measure how much consumers are willing to pay or how much firms must receive in order to produce.
b. reflect who actually pays the tax out of pocket.
c. measure how responsive producers and consumers are to a change in price.
d. reflect how much tax revenue is collected from the tax.
e. determine who is legally responsible for remitting funds to the government.
Answer
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