Suppose a tax is imposed on the buyers of fast-food hamburgers.The burden of the tax will

Question

Quizplus · Accepted Answer

The burden of the tax will be shared by the buyers and sellers of fast-food hamburgers, but not necessarily equally. This is because the buyers will end up paying a higher price for the hamburgers due to the tax, but the sellers may also choose to reduce their profit margins or absorb some of the tax themselves in order to maintain their sales volume. Therefore, the impact of the tax will depend on the relative elasticities of demand and supply for fast-food hamburgers.

Suppose a Tax Is Imposed on the Buyers of Fast-Food