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15 votes
15 votes
Under what conditions do consumers bear the full burden of an excise tax levied on

the producer?

User Ulf Kristiansen
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2.6k points

2 Answers

23 votes
23 votes

If demand is more inelastic than supply, consumers bear most of the tax burden.

khanacademyorg

gas tax is an excise tax

Inelastic demand means that when the price goes up or down, consumers' buying habits stay about the same when the price goes down, consumers' buying habits also remain unchanged

true for things people really need and have no choice but to spend more like co pays for doctors visits

scholarships are often taxed

investopedia

User Nels Beckman
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2.9k points
7 votes
7 votes

Answer:

If demand is more inelastic than supply, consumers bear most of the tax burden.

User Steffen Ullrich
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3.3k points