If demand is unit elastic and the labor supply is ________, the payroll tax is borne mostly by the employer.

Name: If demand is unit elastic and the labor supply is ________, the payroll tax is borne mostly by the employer.
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Question

Quizplus · Accepted Answer

When demand is unit elastic, the burden of a payroll tax falls more on the side of the market that is less elastic. If labor supply is very elastic, workers can easily leave the market, so employers bear most of the tax burden.

If Demand Is Unit Elastic and the Labor Supply Is