If the demand for liquor is elastic,and the government increases liquor tax,then _____.
A)most of the tax will be paid by the consumer
B)most of the tax will be paid by the producer
C)all of the tax will be paid by the consumer
D)all of the tax will be paid by the producer
E)the tax will be paid by the retailer

Question

Quizplus · Accepted Answer

When demand is elastic, consumers are sensitive to price changes, so producers will bear most of the tax burden to avoid losing sales.

If the Demand for Liquor Is Elastic,and the Government Increases