In the eighteenth century, the British Crown instituted a Stamp Tax, a commodity tax on, among other things, newspapers. During this period in history, newspapers were one of the few ways people could learn about world events, and entering the newspaper industry was relatively easy. With this in mind, who likely paid more of the tax: consumers or producers?

Question

Quizplus · Accepted Answer

Since newspapers were a necessary source of information for people, the demand for newspapers was likely more inelastic than the supply. This means that consumers were less likely to reduce their consumption of newspapers even if the price went up due to the tax, and thus would end up paying more of the tax.

In the Eighteenth Century, the British Crown Instituted a Stamp