The burden of a tax falls more heavily on the sellers in a market when

Name: The burden of a tax falls more heavily on the sellers in a market when
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Question

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When demand is elastic and supply is inelastic, a tax would cause a larger increase in price for buyers, leading them to decrease their quantity demanded. As a result, the producers would have to absorb a larger share of the tax burden because they cannot easily reduce their supply.

The Burden of a Tax Falls More Heavily on the Sellers