The tax burden will fall most heavily on buyers of the good when the demand curve

Question

Quizplus · Accepted Answer

When the demand curve is relatively steep and the supply curve is relatively flat, it means that buyers are relatively insensitive to changes in price while sellers have a high responsiveness to price. This results in the burden of the tax falling heavily on the buyers since they are still willing to pay the higher price while sellers can still earn a profit at the lower equilibrium price.

The Tax Burden Will Fall Most Heavily on Buyers of the Good