Asked by Aaron Russell on Jun 30, 2024
Verified
If a tax is imposed on the sellers of a product, then the tax burden will fall entirely on the sellers.
Tax Burden
The overall impact of taxes on an individual's, corporation's, or economy's financial performance and well-being.
Tax Imposed
A financial charge or levy instituted by governmental authorities on individuals, transactions, or properties to generate revenue.
- Acquire knowledge on the subject of tax incidence and the apportionment of the tax load between buyers and sellers.
- Acquire knowledge of how the flexibility of demand and supply affects the division of tax burdens.
Verified Answer
AS
AmanDeep SinghJul 01, 2024
Final Answer :
False
Explanation :
The tax burden is typically shared between sellers and buyers, depending on the elasticities of supply and demand. If demand is more elastic than supply, sellers bear a larger burden of the tax, and vice versa.
Learning Objectives
- Acquire knowledge on the subject of tax incidence and the apportionment of the tax load between buyers and sellers.
- Acquire knowledge of how the flexibility of demand and supply affects the division of tax burdens.