Which of the following is correct? A tax burden a. falls more heavily on the side of the market that is closest to unit elastic. b. falls more heavily on the side of the market that is more elastic. c. is distributed independently of the relative elasticities of supply and demand. d. falls more heavily on the side of the market that is less elastic.

Question

Isabel Velazquez

Business

2 June, 10:41

Which of the following is correct? A tax burden a. falls more heavily on the side of the market that is closest to unit elastic. b. falls more heavily on the side of the market that is more elastic. c. is distributed independently of the relative elasticities of supply and demand. d. falls more heavily on the side of the market that is less elastic.

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Answers (1)

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Ayden Shaffer · Answer 1

The answer is D.

Explanation:

Tax burden can also be called tax incidence and it is a measure of the impact of imposition of tax on the participants i. e producers. Snd seller.

Tax burden or tax incidence the tax burden falls more heavily on the side of the market that is less elastic (the tax burden falls more heavily on participant that is not willing to exit the market when price is high