More of a tax is borne by firms
A) The more elastic is demand and the less elastic is supply
B) The less elastic is demand and the less elastic is supply
C) The more elastic is demand and the more elastic is supply
D) The less elastic is demand and the more elastic is supply

Question

Quizplus · Accepted Answer

When demand is more elastic and supply is less elastic, firms bear more of the tax burden because consumers are more sensitive to price changes, while producers are less able to change their production levels.

More of a Tax Is Borne by Firms