For a given supply of a product, the _____ the price elasticity of demand, the _____ the tax incidence on consumers, and the _____ the incidence on sellers.
A) greater; greater; smaller
B) greater; smaller; greater
C) smaller; greater; greater
D) smaller; smaller; greater

Question

Quizplus · Accepted Answer

When the price elasticity of demand is greater, consumers are more responsive to price changes, so they bear a smaller share of the tax burden, while sellers bear a greater share.

For a Given Supply of a Product, the _____ the Price