When a tax is imposed on the suppliers of a good or service, then

Question

Quizplus · Accepted Answer

The burden of a tax on suppliers is shared between producers and consumers, depending on the elasticity of demand and supply. When demand is less elastic (consumers are less sensitive to price changes), consumers end up bearing a larger portion of the tax because they are less likely to reduce their quantity demanded in response to the price increase that results from the tax.

When a Tax Is Imposed on the Suppliers of a Good