The economic incidence of the tax means:

Question

Quizplus · Accepted Answer

The economic incidence of the tax refers to who actually bears the burden of the tax, which is the group that loses surplus as a result of the tax. This can be consumers, producers, or both, depending on market factors such as elasticity and the ability to pass on costs. The legal obligation to pay the tax (choice A) does not necessarily indicate who actually bears the burden. Similarly, choices C and D are not related to the economic incidence of the tax.

The Economic Incidence of the Tax Means