Buyers of a product will bear the larger part of the tax burden, and sellers will bear a smaller part of the tax burden, when the Question 17 options: a) tax is placed on the buyers of the product. b) supply of the product is more elastic than the demand for the product. c) tax is placed on the sellers of the product. d) demand for the product is more elastic than the supply of the product.

Question

Jair Morton

Business

29 December, 06:24

Buyers of a product will bear the larger part of the tax burden, and sellers will bear a smaller part of the tax burden, when the Question 17 options: a) tax is placed on the buyers of the product. b) supply of the product is more elastic than the demand for the product. c) tax is placed on the sellers of the product. d) demand for the product is more elastic than the supply of the product.

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Answers (1)

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Cruz Gallegos · Answer 1

The correct option is B.

The supply of the product is more elastic than the demand for the product.

Explanation:

The tax burden depends on the relative price elasticity of demand and supply. When supply is more elastic than demand, buyers bear most of the tax burden.