Which of the following is a correct statement about tax burdens?
A tax burden falls most heavily on the side of the market that is more elastic.
A tax burden falls most heavily on the side of the market that is closer to unit elastic.
A tax burden falls most heavily on the side of the market that is less elastic.
A tax burden is distributed independently of relative elasticities of supply and demand.
The correct statement about tax burdens is:
A tax burden falls most heavily on the side of the market that is less elastic.
This is because the side of the market (either supply or demand) that is less elastic is less responsive to price changes, meaning that they will bear a larger share of the tax burden. In contrast, the more elastic side can more easily adjust their behavior in response to the tax, leading them to bear a smaller share of the burden.