For a given elasticity of demand, the less elastic the supply, the

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Quizplus · Accepted Answer

When supply is less elastic than demand, the burden of a tax falls more on the producers/sellers than on the consumers/buyers since producers are less able to adjust their behavior in response to a price change. This means that they will bear a larger share of the tax burden, resulting in a higher price for consumers and a smaller reduction in quantity demanded. Therefore, the less elastic the supply, the larger the share of the tax paid by the sellers.

For a Given Elasticity of Demand, the Less Elastic the Supply