The side of the market that is more inelastic: determines whether to shoulder the majority of...

The side of the market that is more inelastic:

determines whether to shoulder the majority of the tax burden or pass it on.
will bear more of the tax burden.
will share an equal amount of the tax burden.
will bear less of the tax burden.

Solutions

Expert Solution

Tax incidence is the manner in which the tax burden is divided between buyers and sellers .The tax incidence depends on the relative price elasticity of supply and demand.

More Elastic Supply and Less Elastic Demand

When supply is more elastic than demand, consumers will bear more of the burden of a tax than producers will. For example, if supply is twice as elastic as demand, producers will bear one-third of the tax burden and consumers will bear two-thirds of the tax burden.

More Elastic Demand and Less Elastic Supply

When demand is more elastic than supply, producers will bear more of the burden of a tax than consumers will. For example, if demand is twice as elastic as supply, consumers will bear one-third of the tax burden and producers will bear two-thirds of the tax burden.

The side of the market that is more inelastic will bear less burden as compared to side of market which is elastic.

SO (C) PART IS A CORRECT ANSWER

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

whether pitching a softball or throwing a bowling ball is more stressful to the human shoulder....

whether pitching a softball or throwing a bowling ball is more stressful to the human shoulder. find the force exerted the muscle in each scenario to come up with an answer. assumptions: for bowling ball: the weight of the bowling ball is 7.27kg radius of arm =.6 weight of arm is 4 kg this is an underhanded throw For softball: the arm rotates 360 degress (windmill motion) it is an overhand pitch weight of a softball is .198kg weight of...

what determines whether a paralegal is competent

Write a program that determines whether an input string is a palindrome; that is, whether it...

Write a program that determines whether an input string is a palindrome; that is, whether it can be read the same way forward and backward. At each point, you can read only one character of the input string; do not use an array to first store this string and then analyze it (except, possibly, in a stack implementation). Consider using multiple stacks. In Pseudocode please

Which of the following statements is FALSE? A. The more inelastic is the demand for a...

Which of the following statements is FALSE? A. The more inelastic is the demand for a firm's product, the greater is the Lerner index. B. In the long-run, a perfectly competitive firm operates where its average total cost is minimized. C. If the monopolist sets its output such that MR, MC and AVC are all equal, the firm will be indifferent between staying open and shutting down. D. A profit-maximizing firm never produces where P < AVC.

Does the United States’ labor supply tend to be more elastic or more inelastic?

Does the United States’ labor supply tend to be more elastic or more inelastic? Explain the competing theories discussed in our textbook. Which seems more convincing to you? Explain your answer.

Does the United States’ labor supply tend to be more elastic or more inelastic? Explain the...

Does the United States’ labor supply tend to be more elastic or more inelastic? Explain the competing theories discussed in our textbook. Which seems more convincing to you? Explain your answer. (must be at least 2-3 paragraphs)

Does the United States’ labor supply tend to be more elastic or more inelastic? Explain and...

Does the United States’ labor supply tend to be more elastic or more inelastic? Explain and compare the two, which seems more convincing to you? Justify your answer.

1. Sellers will share more burden of tax a. when supply is more inelastic relative to...

1. Sellers will share more burden of tax a. when supply is more inelastic relative to the demand. b. when supply is more elastic relative to the demand. c. when supply and demand both are equally elastic. d. when supply and demand both are equally inelastic. 2. if the government want to raise tax revenue then a. they should be imposing taxes on the products whose demand and supply are elastic. b. they should be imposing taxes on the products...

Does the United States’ labor supply tend to be more elastic or more inelastic? Explain the...

Does the United States’ labor supply tend to be more elastic or more inelastic? Explain the competing theories discussed in our textbook. Which seems more convincing to you? Explain your answer.

For each of the following events, indicate whether it is a demand-side or a supply-side change...

For each of the following events, indicate whether it is a demand-side or a supply-side change and how the event affects that side of the economy. a. Consumers become more pessimistic about the economy. Demand decreases. Demand increases. Supply decreases. Supply increases. b. Technological changes enable workers to be more productive._____ Demand increases. Demand decreases. Supply increases. Supply decreases. c. Manufacturing firms expect steel prices to decrease significantly. ____Demand decreases. Supply decreases. Demand increases. Supply increases. d. The Affordable Care...

Subjects