The size of a tax distortion depends on how elastic the parties are to a transaction.

Name: The size of a tax distortion depends on how elastic the parties are to a transaction.
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Quizplus · Accepted Answer

The size of a tax distortion is indeed influenced by the elasticity of the parties involved in a transaction. If either the buyer or the seller is highly responsive (elastic) to price changes, a tax can significantly alter their behavior, leading to larger distortions in the market.

The Size of a Tax Distortion Depends on How Elastic