In general,on which side of the market does a tax burden fall more heavily

Question

Quizplus · Accepted Answer

The tax burden will fall more heavily on the side of the market that is less elastic because there are fewer substitutes for the product or service, meaning consumers are less responsive to changes in price. This gives producers more power to pass on the tax to consumers in the form of higher prices. On the other hand, if the market is more elastic, consumers are more sensitive to changes in price and may shift to substitutes if prices increase, reducing the power of producers to pass on the tax.

In General,on Which Side of the Market Does a Tax