The burden of a tax on a good falls at least partially on consumers if the:

Question

Quizplus · Accepted Answer

When a tax is imposed on a good, the seller of the good may choose to increase the price to maintain their profit margin. This increase in price is partially passed on to the consumer, resulting in an increase in the price paid by consumers for the good. Therefore, the burden of the tax falls at least partially on consumers. Option A is incorrect because a decrease in price paid by consumers would mean that the seller is absorbing the entire tax, which is unlikely to happen. Option C and D are also incorrect because the wages of workers who produce the good are not directly affected by the tax.

The Burden of a Tax on a Good Falls at Least