The way that a burden of a tax is shared is determined by:
A) whether the tax is placed on buyers or sellers of a good.
B) the elasticities of supply and demand.
C) the cross-price elasticity of demand.
D) the income elasticity of demand.

Question

Quizplus · Accepted Answer

The burden of a tax is determined by the elasticities of supply and demand because they measure how much quantity supplied and quantity demanded respond to changes in price, affecting how the tax burden is distributed between buyers and sellers.

The Way That a Burden of a Tax Is Shared