When price elasticity of supply is _____, this tends to increase the portion of the tax paid by sellers.

Question

Quizplus · Accepted Answer

When the price elasticity of supply is inelastic, sellers are less able to adjust their quantity supplied in response to price changes, including those due to taxes. As a result, sellers bear a larger portion of the tax burden because they cannot easily change their production levels to avoid the tax.

When Price Elasticity of Supply Is _____, This Tends to Increase