Suppose that a tax is placed on a particular good. If the sellers end up bearing most of the tax burden, this indicates that the
A) demand is more inelastic than supply.
B) supply is more inelastic than demand.
C) government has required that buyers remit the tax payments.
D) government has required that sellers remit the tax payments.

Question

Quizplus · Accepted Answer

When supply is more inelastic than demand, sellers cannot easily change the quantity they produce, so they bear more of the tax burden.

Suppose That a Tax Is Placed on a Particular Good