Tax incidence focuses on who:

Question

Quizplus · Accepted Answer

Tax incidence refers to who bears the economic burden of a tax, which is usually not the same as the statutory or legal burden. The burden of a tax is shared by both buyers and sellers, depending on the relative elasticities of demand and supply. The more inelastic the demand and supply for a good or service, the more likely it is that the burden of the tax will be borne by the consumer or producer, respectively. Ultimately, the incidence of the tax depends on how the market participants adjust their behavior in response to the tax.

Tax Incidence Focuses on Who