Given demand, the more inelastic the supply of a product, the larger the portion of an excise tax that is borne by producers.

Name: Given demand, the more inelastic the supply of a product, the larger the portion of an excise tax that is borne by producers.
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Question

Quizplus · Accepted Answer

When supply is inelastic, producers cannot easily change the quantity supplied in response to price changes, so they bear a larger share of the tax burden.

Given Demand, the More Inelastic the Supply of a Product