Question

In: Economics

If a tax is levied on the buyers of dog food, then buyers will bear the...

If a tax is levied on the buyers of dog food, then

buyers will bear the entire burden of the tax.

sellers will bear the entire burden of the tax.

buyers and sellers will share the burden of the tax.

the government will bear the entire burden of the tax.

Solutions

Expert Solution

If a tax is levied on the buyers of dog food, then buyers and sellers will share the burden of the tax. The share in the burden of tax will be based on the elasticity of demand and supply. More elastic the demand, lower share of tax burden will be on buyers and vice versa.

Rahul Sunny answered 2 years ago
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