Use the following to answer question:
-(Figure: Tax Incidence)Use Figure: Tax Incidence.All other things unchanged,when a good or service is characterized by a relatively inelastic demand,as shown in panel _____,the greater share of the burden of an excise tax on it is borne by _____.

Question

Use the following to answer question: 
-(Figure: Tax Incidence)Use Figure: Tax Incidence.All other things unchanged,when a good or service is characterized by a relatively inelastic demand,as shown in panel _____,the greater share of the burden of an excise tax on it is borne by _____.

Quizplus · Accepted Answer

When demand is relatively inelastic, as depicted in panel D, consumers are less sensitive to price changes. Therefore, they bear a greater share of the tax burden, making option D correct.

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