The demand and the supply for a good are each neither perfectly elastic nor perfectly inelastic. If a sales tax on sellers of the good is imposed, the tax is paid by

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When a sales tax is imposed on sellers, the tax burden is shared between buyers and sellers depending on the relative elasticities of demand and supply. Since neither is perfectly elastic or inelastic, both parties will bear some of the tax burden.

The Demand and the Supply for a Good Are Each