If consumers pay more of a tax than do the producers,
A)demand is more elastic than supply.
B)the amount of tax revenue collected by the government is almost zero.
C)supply is more elastic than demand.
D)the equilibrium price paid by consumers rises by less than half the amount of the tax.
E)None of the above answers is correct.

Question

Quizplus · Accepted Answer

When supply is more elastic than demand, consumers bear a larger burden of the tax because producers can more easily adjust their quantity supplied, leaving consumers to absorb more of the tax impact.

If Consumers Pay More of a Tax Than Do the Producers