The burden of a tax on soft drinks would fall more on ________ the more ________.
A)producers; inelastic the demand curve.
B)consumers; inelastic the demand curve.
C)producers; elastic the supply curve.
D)consumers; inelastic the supply curve.

Question

Quizplus · Accepted Answer

If the demand for soft drinks is inelastic, consumers will continue buying them despite the increase in price due to the tax. This means that the burden of the tax will fall more heavily on consumers, as they will be paying the higher price. If the demand were more elastic, consumers would be more responsive to price changes and the tax burden would likely be shared between producers and consumers.

The Burden of a Tax on Soft Drinks Would Fall