In which of the above market situations will the largest portion of an excise tax of a specified amount per unit of output be borne by producers?

Question

Quizplus · Accepted Answer

In market situation 3, the supply curve is relatively more elastic than the demand curve, which means that producers are better equipped to adjust their production and sales in response to an excise tax than consumers. Hence, the largest portion of an excise tax of a specified amount per unit of output will be borne by producers in this situation.

In Which of the Above Market Situations Will the Largest