Asked by
AbbySue Campbell
on Oct 25, 2024Verified
The demand for food is very inelastic compared to the supply of food,so if a tax is imposed on the consumers of food,the tax incidence:
A) is typically on consumers more than producers.
B) is typically on producers more than consumers.
C) is typically split equally between consumers and producers.
D) cannot be determined without more information.
Tax Incidence
Tax Incidence refers to the analysis of the effect of a particular tax on the distribution of economic welfare, showing which group – consumers or producers – ultimately bears the burden of the tax.
Inelastic Supply
Describes a situation where the quantity supplied of a good or service is relatively unresponsive to changes in its price.
Consumers Of Food
Individuals or entities that ingest food products for nourishment and energy.
- Identify the adaptability of demand and supply forces and their impact on tax incidence allocation.
- Acquire knowledge on how excise taxes influence consumer surplus, producer surplus, and deadweight loss.
Verified Answer
UM
Learning Objectives
- Identify the adaptability of demand and supply forces and their impact on tax incidence allocation.
- Acquire knowledge on how excise taxes influence consumer surplus, producer surplus, and deadweight loss.