The incidence of a tax depends on:

Question

Quizplus · Accepted Answer

The incidence of a tax depends on the relative elasticities of supply and demand. If the demand is more elastic than the supply, the burden of the tax falls on the producer, and if the supply is more elastic than demand, the burden falls on the consumer. The other options are not directly related to the incidence of a tax. The incidence of a tax depends on the relative elasticities of supply and demand. When demand is more elastic than supply, consumers are able to shift the burden of the tax onto producers, and vice versa if supply is more elastic than demand. The other options are not relevant to the incidence of a tax.

The Incidence of a Tax Depends On