To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply.

Question

To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply.
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Quizplus · Accepted Answer

The incidence of a tax, which refers to how the burden of a tax is distributed between buyers and sellers, depends on the relative elasticities of demand and supply. If demand is more elastic than supply, sellers bear a larger share of the tax burden, and vice versa.

To Determine the Incidence of a Tax, It Is Necessary