Figure 18-2
-On necessities, more of the incidence of tax is
A)borne by the producer.
B)borne by the consumer.
C)shared equally between the producer and the consumer.
D)None of these are correct.

Question

Figure 18-2 
-On necessities, more of the incidence of tax is
A)borne by the producer. 
B)borne by the consumer. 
C)shared equally between the producer and the consumer. 
D)None of these are correct.

Quizplus · Accepted Answer

Necessities are goods that are considered essential for basic living needs, such as food, housing, and clothing. In general, consumers have limited ability to reduce their consumption of necessities in response to price changes. Therefore, they are more likely to bear a greater share of the incidence of tax compared to producers.

Figure 18-2 -On Necessities, More of the Incidence of Tax Is