Which of the following statements about specific excise taxes is true?

Question

Quizplus · Accepted Answer

Specific excise taxes are often levied on goods that are viewed as harmful, such as cigarettes or alcohol, and are intended to discourage their consumption. Since these goods are often inelastic, meaning that people will continue to buy them even if the price goes up, the burden of the tax can be shifted to the buyers in the form of higher prices. However, studies have shown that in many cases, a significant portion of the tax is actually borne by the sellers, who may reduce their profit margins to avoid losing customers.

Which of the Following Statements About Specific Excise Taxes Is