Typically, who faces the larger economic incidence of a tax?

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Typically, who faces the larger economic incidence of a tax?

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Answer 1

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Ans) When government imposes tax, it does not really matter upon whom the tax is imposed, burden is shared by both buyers and sellers. Now who will bear greater burden of tax depends upon the elasticity of demand and supply. Accordingly, less elastic side of the market bears greater burden of tax.

ST S p tax burden on buyers cs Po [Demand more elastic) Pet Revenuel Dwe Ps D PS QT tax burden on sellers Qe

ST S P tax burden on buyers [Demand less elastic) CS PB Revenue Dwi Pe PS PS Com QT tax burden on sellers Qe

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Answer 2

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Typically, who faces the larger economic incidence of a tax?

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Typically, who faces the larger economic incidence of a tax?

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Typically, who faces the larger economic incidence of a tax?