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sellers of a product will bear the larger part of the tax burden, and buyers will bear a smaller part of the tax burden, when the question 35 options: a) tax is placed on the buyers of the product. b) demand for the product is more elastic than the supply of the product. c) supply of the product is more elastic than the demand for the product. d) tax is placed on the sellers of the product.

Sagot :

When the supply of a good is more elastic than that of the demand for it, sellers of the good will bear a larger portion of a tax burden, and buyers would then bear a smaller portion of the tax burden.

The correct option is C.

What does demand elasticity mean?

Elastic elastic demand is one where there is a significant shift in the quantity demanded as a result of a price change. A small variation in the quantity demanded as a result of a price change is referred to as inelastic demand. The method here for calculating elasticity.

Elastic or inelastic demand—which is preferable?

Since the demand for inelastic goods won't change, they are more likely to continue generating income during bear markets or recessions. Businesses that manufacture products with elastic demand can boost revenue besides lowering price. Companies that manufacture goods to inelastic demand can boost revenue by raising their price.

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