Sellers of a product will bear the larger part of the tax burden,and buyers will bear a smaller part of the tax burden,when

Question

Quizplus · Accepted Answer

When the demand for a product is more elastic than the supply, buyers are more responsive to price changes and can reduce their quantity demanded more easily. As a result, sellers cannot pass on much of the tax to buyers and thus bear a larger portion of the tax burden.

Sellers of a Product Will Bear the Larger Part of the Tax