lecture 11 Flashcards
1
Q
What is tax incidence
A
the division of the burden of a tax between buyers and
sellers.
2
Q
if the market price rises by the full amount of tax, then the…
A
buyer pays the tax
3
Q
if the market price rises by a lesser amount than the tax, then…
A
the buyers & sellers share the burden of the tax
4
Q
If the market price doesn’t rise at all, then…
A
sellers pay the tax
5
Q
A
