In general, tax incidence falls more on the _____ if demand for the product taxed is elastic, and falls more on the _____ if demand for the product is inelastic.
A) buyer; buyer
B) buyer; seller
C) seller; buyer
D) seller; seller

Question

Quizplus · Accepted Answer

When demand is elastic, consumers are more sensitive to price changes and can more easily switch to alternatives, reducing the tax burden on them and shifting it to sellers. Conversely, when demand is inelastic, consumers are less sensitive to price changes, meaning they'll continue to buy the product despite higher prices, leading to a greater tax burden on them.

In General, Tax Incidence Falls More on the _____ If