Use the following to answer questions :
Figure: Tax Incidence
-(Figure: Tax Incidence)Use Figure: Tax Incidence.All other things unchanged,when a good or service is characterized by a relatively elastic demand,as shown in panel _____,the greater share of the burden of an excise tax on it is borne by _____.

Question

Use the following to answer questions :
Figure: Tax Incidence 
-(Figure: Tax Incidence)Use Figure: Tax Incidence.All other things unchanged,when a good or service is characterized by a relatively elastic demand,as shown in panel _____,the greater share of the burden of an excise tax on it is borne by _____.

Quizplus · Accepted Answer

When demand is relatively elastic, sellers bear a greater share of the tax burden because buyers are more responsive to price changes and can reduce their quantity demanded more easily.

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