The incidence of a tax

Name: The incidence of a tax
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The incidence of a tax refers to who ends up paying for it. While the initial burden of the tax is on the supplier, the actual incidence (or final burden) of the tax could be borne by the consumer, the supplier or shared by both. The incidence also varies with the elasticities of the demand and supply curves. Therefore, the best answer is C as the incidence of the tax is borne by various market participants.

The Incidence of a Tax