The buyer pays most of a tax if supply is relatively elastic because
A)the buyer cannot easily substitute to other markets.
B)the seller can easily substitute to other markets.
C)the government forces the seller to bear the burden.
D)there is a black market for this good.
E)the seller cannot easily substitute to other goods.

Question

Quizplus · Accepted Answer

When supply is relatively elastic, sellers can more easily change their production or switch to different markets in response to the tax. This flexibility means they can avoid the tax's burden more effectively than buyers, who may have fewer alternatives or less flexibility, leading to buyers bearing most of the tax burden.

The Buyer Pays Most of a Tax If Supply Is