Q
Refer to Exhibit 4. Which of the following is true with regard to the burden of the tax in Exhibit 4 ?
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A
A. The buyers pay a larger portion of the tax because demand is more inelastic than supply
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B
B. The sellers pay a larger portion of the tax because supply is more elastic than demand
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C
C. The buyers pay a larger portion of the tax because demand is more elastic then supply
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D
D. The sellers pay a larger portion of the tax because supply is more inelastic than demand
Correct Answer:
D. D. The sellers pay a larger portion of the tax because supply is more inelastic than demand
