Figure 6-13

-Refer to Figure 6-13. How is the burden of the tax shared between buyers and sellers? Buyers bear

Question

Figure 6-13
 
-Refer to Figure 6-13. How is the burden of the tax shared between buyers and sellers? Buyers bear

Quizplus · Accepted Answer

The burden of the tax shared between buyers and sellers depends on the elasticity of demand and supply. Without seeing Figure 6-13, the specific distribution of tax burden (e.g., three-fourths by buyers and one-fourth by sellers) can't be directly determined. However, the correct answer is typically deduced from analyzing how the tax affects the equilibrium price and quantity, and how these changes are distributed between consumers and producers. This distribution is influenced by the relative elasticities of supply and demand; the more inelastic side bears a larger share of the tax burden.

Figure 6-13 -Refer to Figure 6-13. How Is the Burden of the the Burden