If a tax is placed on suppliers of a good, then the incidence of the tax
A)falls more on the suppliers if demand is elastic.
B)falls more on the suppliers if demand is inelastic.
C)is usually split equally between the consumers and the producers.
D)usually falls more on the producers than the consumers.
E)usually falls more on the consumers than the producers.

Question

Quizplus · Accepted Answer

When demand is elastic, consumers are more sensitive to price changes, so suppliers bear more of the tax burden.

If a Tax Is Placed on Suppliers of a Good