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

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When the supply curve is steeper (more inelastic), it means that suppliers are less responsive to changes in price. In this case, a sales tax will lead to a smaller decrease in quantity supplied and sellers will bear a larger portion of the tax burden relative to buyers. This is because the tax cannot be easily passed on to consumers in the form of higher prices without a significant decrease in the quantity demanded. Therefore, when the supply curve is more inelastic, the burden of the sales tax falls more heavily on the sellers.

Applying Supply and Demand Analysis, with Other Factors Held Constant