The division of the burden of a sales or excise tax on demanders and suppliers:

Question

Quizplus · Accepted Answer

The division of the burden of a sales or excise tax on demanders and suppliers depends on the shapes of the demand and supply curves. If the demand curve is relatively inelastic, demanders bear a higher proportion of the tax burden. Conversely, if the supply curve is relatively inelastic, suppliers bear a higher proportion of the tax burden. In general, the more elastic curve (whether demand or supply) bears a lower proportion of the tax burden.

The Division of the Burden of a Sales or Excise