Principles of Microeconomics / Unit 4 MIC 0323 short lesson, about 20 seconds
Tax Incidence: Who Bears the Burden
Captions available
The idea
Tax incidence is how the burden divides between buyers and sellers. The more inelastic side bears more: inelastic demand puts most on buyers; inelastic supply puts most on sellers.
In practice
A cigarette tax lands mostly on smokers; a beachfront hotel tax lands mostly on the hotels.
Where people slip
Who writes the check is irrelevant. Only the two elasticities decide the split.
Your place on the trail
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