If the elasticity of demand is low, then the introduction of excise taxes implies:
A)tax revenue generated is low.
B)tax revenue generated is high.
C)consumers pay proportionally less than producers.
D)consumers pay proportionally more than producers.

Question

Quizplus · Accepted Answer

When the elasticity of demand is low, consumers are less sensitive to price changes, meaning they will continue to buy the product even if the price increases due to an excise tax. This results in consumers bearing a larger portion of the tax burden compared to producers.

If the Elasticity of Demand Is Low, Then the Introduction