-The figure above shows the market for digital cameras. If a tax on digital cameras of $30 per camera is imposed on sellers of digital cameras, buyers will pay a ________ fraction of the tax than sellers will pay because the demand is ________ elastic than the supply is.

Question

Quizplus · Accepted Answer

The tax incidence falls more heavily on the side of the market with the less elastic demand. In this case, the demand is more elastic than the supply, so buyers will pay a smaller fraction of the tax than sellers will pay.

-The Figure Above Shows the Market for Digital Cameras