If the government wants to raise tax revenue and shift most of the tax burden to the sellers it would impose a tax on a good with a
A) flat (elastic) demand curve and a steep (inelastic) supply curve.
B) steep (inelastic) demand curve and a flat (elastic) supply curve.
C) steep (inelastic) demand curve and steep (inelastic) supply curve.
D) flat (elastic) demand curve and a flat (elastic) supply curve.

Question

Quizplus · Accepted Answer

When demand is elastic and supply is inelastic, sellers bear more of the tax burden because they cannot easily reduce the quantity supplied, while buyers can reduce the quantity demanded.

If the Government Wants to Raise Tax Revenue and Shift