Suppose that a tax is placed on a particular good. If the buyers end up bearing most of the tax burden, this indicates that the
A) demand is more inelastic than the supply.
B) supply is more inelastic than the demand.
C) government has required that buyers remit the tax payments.
D) government has required that buyers remit the tax payments

Question

Quizplus · Accepted Answer

When demand is more inelastic than supply, buyers are less responsive to price changes, so they bear a larger share of the tax burden.

Suppose That a Tax Is Placed on a Particular Good