Economics · Public Finance and Taxation
The incidence of a product tax tends to fall mainly on the consumer when:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Demand is perfectly elastic while supply is inelastic
- 2Both demand and supply are perfectly unit elastic
- 3Demand is elastic while supply is inelastic, and on the producer when the opposite holds
- 4Demand is inelastic while supply is elastic, and on the producer when the opposite holds✓
Correct answer
Demand is inelastic while supply is elastic, and on the producer when the opposite holds
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