Tax incidence with perfectly elastic supply requires demand information

Steps:

• Infinite supply elasticity means the supply curve is horizontal; sellers receive the original $1 per unit after tax.
• A 15% ad valorem tax shifts the supply curve up, raising consumer price to $1/(1-0.15) ≈$1.176 (if tax on consumer price) or $1.15 (if on producer price).
• New quantity demanded depends on demand elasticity, which is not provided.
• Government revenue = tax rate × new consumer price × new quantity, but new quantity is unknown.

Why B is correct:

• Not applicable; calculation assumes specific demand elasticity not stated.

Why the others are wrong:

• A: Too low; ignores scale of sales.
• C: Equals initial total value ($1000 × 0.10), unrelated to 15% tax.
• D: Assumes quantity unchanged at 1000 units ($1000 × 0.15), but price rise reduces quantity.

Not enough information. Final answer: Not enough information.