Those with more inelastic demands will bear a larger burden of a tax because they:
A) have more buying power.
B) have more income.
C) will switch to other products with a tax.
D) have fewer substitutes for that good.

Question

Quizplus · Accepted Answer

When demand is inelastic, consumers are less responsive to price changes, meaning they have fewer substitutes and are more likely to continue purchasing the good even after a tax increases its price. This results in them bearing a larger burden of the tax.

Those with More Inelastic Demands Will Bear a Larger Burden