Figure 6-25
-Refer to Figure 6-25.Suppose the same supply and demand curves apply,and a tax of the same amount per unit as shown here is imposed.Now,however,the sellers of the good,rather than the buyers,are required to pay the tax to the government.After the sellers are required to pay the tax,relative to the case depicted in the graph,the burden on buyers will be

Question

Figure 6-25 
-Refer to Figure 6-25.Suppose the same supply and demand curves apply,and a tax of the same amount per unit as shown here is imposed.Now,however,the sellers of the good,rather than the buyers,are required to pay the tax to the government.After the sellers are required to pay the tax,relative to the case depicted in the graph,the burden on buyers will be

Quizplus · Accepted Answer

The tax incidence, or the distribution of the tax burden between buyers and sellers, depends on the relative elasticities of supply and demand, not on who is legally responsible for paying the tax. Therefore, the burden on buyers and sellers remains the same regardless of whether buyers or sellers are required to pay the tax.

Figure 6-25 -Refer to Figure 6-25.Suppose the Same Supply and Demand Curves