For a good with a highly elastic demand, such as black beans, and an upward-sloping supply curve:
A)consumers will bear most of the burden of a tax.
B)consumers will bear an insignificant part of the burden of a tax.
C)consumers and producers will split the burden of a tax in half.
D)producers will not bear any of the burden of a tax.

Question

Quizplus · Accepted Answer

When demand is highly elastic, consumers are very responsive to price changes and can easily switch to substitutes if the price of black beans increases due to a tax. Therefore, producers will bear a larger portion of the tax burden, leaving consumers with an insignificant part of it.

For a Good with a Highly Elastic Demand, Such as Black