Asked by Derek Timmer on May 21, 2024
Verified
The distribution of the burden of a tax depends strictly on the elasticity of supply.
Elasticity of Supply
A measure of how much the quantity supplied of a good changes in response to a change in price.
- Investigate the determinants affecting how tax incidence is shared between consumers and sellers.
Verified Answer
CG
Cherise GrahamMay 21, 2024
Final Answer :
False
Explanation :
The distribution of the burden of a tax depends on both the elasticity of supply and the elasticity of demand. The relative elasticities determine how the tax burden is split between buyers and sellers.
Learning Objectives
- Investigate the determinants affecting how tax incidence is shared between consumers and sellers.