-If a sales tax is imposed on a product,which of the following statements is correct?
A)If the demand for the product is inelastic,the seller will pay a larger percentage of the tax than will the consumer.
B)If the demand for the product is elastic,the seller will pay a smaller percentage of the product than will the consumer.
C)The consumer will pay 100% of the tax.
D)If the demand for the product is inelastic,the consumer will pay a larger percentage of the tax than will the seller.

Question

-If a sales tax is imposed on a product,which of the following statements is correct?
A)If the demand for the product is inelastic,the seller will pay a larger percentage of the tax than will the consumer. 
B)If the demand for the product is elastic,the seller will pay a smaller percentage of the product than will the consumer. 
C)The consumer will pay 100% of the tax. 
D)If the demand for the product is inelastic,the consumer will pay a larger percentage of the tax than will the seller.

Quizplus · Accepted Answer

When demand is inelastic, consumers are less sensitive to price changes, meaning they will continue to buy the product even if the price increases due to the tax. Therefore, the consumer ends up bearing a larger portion of the tax burden than the seller.

-If a Sales Tax Is Imposed on a Product,which of the Following