The ability to shift a tax burden depends on the relative elasticities of demand and supply for the taxed commodity.

Question

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If the demand for a product is highly elastic (i.e. highly responsive to changes in price), then the burden may be shifted more to the producer. On the other hand, if the supply of a product is highly elastic (i.e. highly responsive to changes in price), then the burden may be shifted more to the consumer. The ability to shift a tax burden ultimately depends on the relative elasticities of supply and demand.

The Ability to Shift a Tax Burden Depends on the Relative