A tax levied on producers is fully shifted to producers when:
Supply is perfectly inelastic.
In a scenario of perfect inelasticity, the quantity demanded remains constant regardless of the price. The term "perfect elasticity" describes a situation in which the quantity demanded is very responsive to price fluctuations, with even a minor change in price causing a significant change in the quantity demanded.
A demand curve is said to be totally inelastic if it is perfectly vertical (up and down). The excellent is referred to as "elastic" or "very elastic" if the curve is shallow rather than steep. This implies that a little change in the good's price will result in a significant change in the amount required.
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