Suppose that 19th-century politicians had succeeded in their attempt to impose a "single tax"-a tax on suppliers of land (i.e., landlords).Most of the economic burden of the tax would have been borne by
A)renters, because the demand for land is generally less elastic than its supply.
B)renters, because the demand for land is generally more elastic than its supply.
C)landlords, because the demand for land is generally less elastic than its supply.
D)landlords, because the demand for land is generally more elastic than its supply.

Question

Quizplus · Accepted Answer

The elasticity of demand and supply determines who bears the economic burden of a tax. When the demand for a good is more elastic than its supply, the suppliers bear the majority of the burden. That is because if the supplier increases the price, buyers can easily switch to substitutes or reduce their consumption, thereby lowering the supplier's revenue. In the case of land, the demand is generally more elastic than the supply because land is a fixed asset, and its availability cannot be influenced by the suppliers. Therefore, if a tax on land is imposed, landlords would bear most of the economic burden, as they would not be able to pass on the entire tax to the renters. The renters' demand for land would reduce, leading to a fall in rent's value paid to landlords. This outcome would lead to a decrease in the landlords' ability and incentive to provide more land for rent.

Suppose That 19th-Century Politicians Had Succeeded in Their Attempt to Impose