Question

The incidence of an excise tax depends on the price elasticity of the taxed good's supply and demand curves. The economic entity with the least flexibility in terms of their production and consumption substitutes incur the largest burden of excise taxes._____________

Answer 1

True

Step-by-step explanation:

An excise tax is a tax levied on the consumption of a specific product or service. If the price elasticity of demand of a product that is affected by a excise tax is lower than -1 (price elasticity of demand is usually negative), the quantity demanded for that product will be seriously affected (will decrease significantly) by the excise tax.