______ determine(s) whether buyers or sellers ultimately bear the majority of the tax burden.
A) The amount of the tax
B) Who the tax is originally imposed on
C) Whether the tax is a commodity tax
D) The relative elasticities of demand and supply

Question

Quizplus · Accepted Answer

The relative elasticities of demand and supply determine the incidence of the tax, as the more inelastic side will have a higher burden of the tax. If demand is more elastic than supply, buyers will bear a lesser proportion of the tax burden and vice versa. The other options do not necessarily determine the incidence of the tax.

______ Determine(s) Whether Buyers or Sellers Ultimately Bear the Majority