Which of the following is a correct statement about tax burdens?
A) A tax burden is distributed independently of relative elasticities of supply and demand.
B) A tax burden falls most heavily on the side of the market that is closer to unit elastic.
C) A tax burden falls most heavily on the side of the market that is less elastic.
D) A tax burden falls most heavily on the side of the market that is more elastic.

Question

Quizplus · Accepted Answer

The tax burden falls more heavily on the side of the market that is less elastic because that side is less responsive to price changes and cannot easily avoid the tax by changing the quantity bought or sold.

Which of the Following Is a Correct Statement About Tax