The more elastic that supply and demand are in any market, the more taxes in that market distorts behaviour.

Question

Quizplus · Accepted Answer

When supply and demand are more elastic, it means that buyers and sellers are more sensitive to changes in price. Therefore, when taxes are imposed in such a market, it is more likely to distort behavior as buyers and sellers may choose to shift their behavior towards other substitutes or change their production and consumption patterns.

The More Elastic That Supply and Demand Are in Any