places a tax wedge of Rs.1.00 between the price the buyers pay and the price the sellers receive

decreases the price the sellers receive by Rs.1.00 per litre

increases the price the buyers pay by Rs.1.00 per litre

increases the price the buyers pay by precisely Rs.0.50 and reduces the price received by sellers by precisely Rs.0.50

both supply and demand are elastic

both supply and demand are inelastic

demand is inelastic and supply is elastic

demand is elastic and supply is inelastic

falls more heavily on sellers.

falls entirely on sellers

falls more heavily on buyers

is evenly distributed between buyers and sellers

both supply and demand are inelastic

demand is elastic and supply is inelastic

both supply and demand are elastic

demand is inelastic and supply is elastic

The tax burden generated from a tax placed on a good consumers perceive to be a necessity will fall most heavily on the sellers of the good

The burden of a tax falls on the side of the market (buyers or sellers) from which it is collected

The distribution of the burden of a tax is determined by the relative elasticities of supply and demand and is not determined by legislation.

The tax burden falls most heavily on the side of the market (buyers or sellers) that is most willing to leave the market when price movements are unfavourable to them.