Which of the following generalizations about the burden of an excise tax is correct?
A) The more inelastic the supply of a product, the larger the portion of an excise tax will be paid by buyers.
B) The more inelastic the demand for a product, the larger the portion of an excise tax will be paid by buyers.
C) The more elastic the supply of a product, the smaller the portion of an excise tax will be paid by buyers.
D) The burden of an excise tax on a product is independent of the elasticity of the supply and demand for the product on which the tax is levied.
Correct Answer:
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