Tax Burden Depends on Elasticity of Demand/Supply

Answered using GPT-4o mini by AI Answer Generator

Question:

The burden of a tax rests most heavily with the party who can better “escape” the tax.

False True

Answer:

False.

The burden of a tax typically rests more heavily on the party that has less ability to "escape" the tax, meaning that the party with less elasticity in their demand or supply will bear a greater burden. In other words, if one party can more easily adjust their behavior to avoid the tax (for example, by changing their consumption or production levels), they will bear a smaller share of the