If the quantity demanded is relatively insensitive to changes in price and the quantity supplied is relatively sensitive to changes in price,the imposition of a sales tax will

Question

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When the quantity demanded is relatively inelastic (insensitive to price changes) and the quantity supplied is relatively elastic (sensitive to price changes), the burden of a sales tax falls more heavily on the buyer. This is because buyers are less responsive to price increases, while sellers can more easily adjust their quantity supplied in response to the tax.

If the Quantity Demanded Is Relatively Insensitive to Changes in Price