As long as neither supply nor demand is perfectly elastic, both suppliers and demanders will pay part of any tax.

Question

Quizplus · Accepted Answer

When neither supply nor demand is perfectly elastic, both suppliers and demanders are responsive to changes in price. This means that if a tax is imposed on the product, the price will increase, and both suppliers and demanders will pay part of the tax. The exact share each party pays will depend on the relative elasticity of supply and demand.

As Long as Neither Supply nor Demand Is Perfectly Elastic