The more elastic the supply of a product, the more the actual burden of a tax on the product will:
A) fall on sellers.
B) fall on buyers.
C) fall equally on both buyers and sellers.
D) create a smaller deadweight loss (or excess burden).

Question

Quizplus · Accepted Answer

When the supply of a product is more elastic, sellers are more responsive to price changes and can more easily adjust their quantity supplied. This means they can avoid the tax burden by reducing the quantity they supply, shifting more of the tax burden to buyers, who have fewer alternatives and must absorb more of the cost.

The More Elastic the Supply of a Product, the More