If supply is elastic, the imposition of a tax
A)falls more heavily on consumers
B)falls more heavily on producers
C)falls more heavily on monopoly sellers than competitive sellers
D)will alter both buyer and seller plans equally
E)change seller expectations about consumer tastes

Question

Quizplus · Accepted Answer

When supply is elastic, producers can easily change the quantity they supply in response to price changes. Therefore, consumers bear a larger burden of the tax because producers can pass on the tax to consumers in the form of higher prices.

If Supply Is Elastic, the Imposition of a Tax