The tax burden for a good falls largely on _____.
A)the producers who have a more elastic supply of the good
B)the consumers who have a less elastic demand for the good
C)the consumers who have unit elastic demand for the good
D)the producers who have unit elastic supply of the good
E)the producers who have perfectly elastic supply of the good

Question

Quizplus · Accepted Answer

When a good has a less elastic demand, the consumers are willing to pay a higher price for the good, which means that they bear a larger part of the tax burden. On the other hand, if the producers have a more elastic supply, they can shift a part of the burden on to the consumers by increasing the price of the good. But if the consumers are less elastic in their demand, they will bear a larger part of the tax burden.

The Tax Burden for a Good Falls Largely on _____