The more elastic the supply of a product, the more likely it is that the
A) burden of a tax on the product will fall on sellers.
B) burden of a tax on the product will fall on buyers.
C) burden of a tax on the product will fall equally on both buyers and sellers.
D) deadweight loss of the tax will be smaller.

Question

Quizplus · Accepted Answer

When supply is more elastic, sellers can more easily adjust their quantity supplied in response to a tax, so the burden of the tax is more likely to fall on buyers who have less flexibility in their demand.

The More Elastic the Supply of a Product, the More