A government increased a specific tax on shoes. The resulting increase in the price of shoes was paid mainly by the consumer and not by the producer.
What must be true for this to happen?
The price elasticity of demand was less than the price elasticity of supply.
2 )
The price elasticity of demand was unitary.
3 )
The price elasticity of supply was less than one.
4 )
The price elasticity of supply was inelastic while the price elasticity of demand was elastic.
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