A $1 per gallon tax is levied on gasoline consumption. If the supply of gasoline is perfectly elastic in the long run then
A. The market price of gasoline will not be affected by the tax in the long run
b. The market price of gasoline will increase by the amount of tax per galloon of gasoline in the long run
C. The tax will not be shifted to consumers of gasoline in the long run
D. The tax will have no effect on the quantity of gasoline sold
Answer: B
Microeconomics
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