In an industry, (1) demand is unit elastic (i.e., the elasticity of demand equals one) and (2)
supply is unit elastic (i.e., the elasticity of supply equals one). Suppose a tax is imposed on the
industry. Which statement is true?
a) Sellers bear the entire burden of the tax.
b) Buyers bear the entire burden of the tax.
c) Buyers and sellers each bear some of the burden of the tax.
d) There is insufficient information to answer the question.