When demand is more elastic than supply,
A) producers bear the majority of the tax burden.
B) consumers bear the majority of the tax burden.
C) producers and consumers bear an equal amount of the tax burden.
D) consumers bear all of the tax burden.

Question

Quizplus · Accepted Answer

When demand is more elastic than supply, consumers are more responsive to price changes, so producers cannot pass on much of the tax to consumers. Therefore, producers bear a larger share of the tax burden.

When Demand Is More Elastic Than Supply