Acme Inc.'s property taxes increased by $65,000 this year. As a result, Acme increased the sale prices of its products to generate $65,000 more revenue. Who bears the incidence of the corporate tax increase?

Question

Quizplus · Accepted Answer

The customers bear the incidence of the corporate tax increase, as Acme increased the sale prices to generate more revenue. The increase in prices will ultimately be passed onto the consumers in the form of higher prices, which means the customers will bear the burden of the tax increase.

Acme Inc'S Property Taxes Increased by $65,000 This Year