The ratio of the burden of the tax borne by demanders to the burden of the tax borne by suppliers will be equal to_____.
A)the square of the slope of the demand curve
B)the elasticity of demand times the elasticity of supply
C)the ratio of the absolute values of the slopes of the demand curve and the supply curve
D)the sum of the elasticities of the inverse demand curve and the supply curve

Question

Quizplus · Accepted Answer

The ratio of the burden of the tax borne by demanders to the burden of the tax borne by suppliers is determined by the relative slopes of the demand and supply curves. Specifically, it is equal to the ratio of the absolute values of the slopes of these two curves. Therefore, the correct answer is C. The other options are not valid formulas for calculating the burden of the tax.

The Ratio of the Burden of the Tax Borne by Demanders