passwella.
Menu

WAEC Economics 2010 Question 43

Question 43

Public Finance

When the demand for a good is fairly inelastic, the burden of an indirect tax falls

  1. A.more on the consumers of the good.
  2. B.more on the sellers of the good.
  3. C.on sellers and consumers equally.
  4. D.completely on the capital.
Show the answer and explanation

Answer: A (more on the consumers of the good.)

Explanation

Buyers keep buying despite the higher price, so sellers can pass most of the tax on to them.