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Unformatted text preview: (a tax on sales) the producer or the consumer x But economists know that the true burden of the tax falls more heavily on the one who has a lower elasticity of supply/demand If the consumers demand is very inelastic and the producers supply is very elastic, then the consumer bears more of the tax burden. If the consumers demand is very elastic and the producers supply is very inelastic, then the producer bears more of the tax burden. Page 53...
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This note was uploaded on 12/29/2011 for the course ECO 311 taught by Professor Willis during the Fall '10 term at SUNY Stony Brook.
- Fall '10