In the case of a specific tax,tax incidence is independent of who pays
A) only when supply and demand elasticities are not constant.
B) only when the tax is collected from consumers.
C) in most but not all cases.
D) in all cases.

Question

Quizplus · Accepted Answer

The tax incidence refers to the final burden of a tax, regardless of who initially pays the tax. The burden may be borne by the consumer, producer, or shared between both depending on the relative elasticities of supply and demand. Therefore, tax incidence is independent of who initially pays the tax in all cases.

In the Case of a Specific Tax,tax Incidence Is Independent