When a tax is placed on sellers,the actual incidence:

Question

Quizplus · Accepted Answer

The actual incidence of a tax placed on sellers may be shared between the seller and the buyer. While the seller is responsible for paying the tax to the government, they may pass on some of the cost to the buyer in the form of higher prices. The extent to which this cost is passed on to the buyer depends on the elasticity of supply and demand in the market. If supply is relatively elastic and demand is relatively inelastic, the burden of the tax is likely to be borne more by the seller. However, if supply is relatively inelastic and demand is relatively elastic, the burden of the tax is likely to be borne more by the buyer. In most real-world markets, the burden of the tax is likely to be shared to some extent between the seller and the buyer.

When a Tax Is Placed on Sellers,the Actual Incidence