Applying supply and demand analysis, other factors held constant, the steeper the supply curve (more elastic), the larger the burden of a sales tax that is borne by the sellers.

Question

Applying supply and demand analysis, other factors held constant, the steeper the supply curve (more elastic), the larger the burden of a sales tax that is borne by the sellers.
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Quizplus · Accepted Answer

A steeper supply curve indicates a more elastic supply, meaning that sellers are more sensitive to changes in price. When a sales tax is applied, sellers may be unwilling or unable to absorb the increase in cost, and instead pass it on to consumers in the form of higher prices. Therefore, a steeper supply curve indicates that sellers are likely to pass on a larger portion of the tax burden to consumers.

Applying Supply and Demand Analysis, Other Factors Held Constant, the Steeper