Final answer:
When demand is less elastic than supply, consumers bear most of the tax burden. If demand is less elastic than supply, consumers bear a greater share of the tax burden. An example statement could be 'Supply was 2 times as elastic as demand, and consumers paid 3 times as much of the tax as sellers.'
Step-by-step explanation:
In this case, the question states that demand is not as elastic as supply. When demand is less elastic (or more inelastic) than supply, consumers bear most of the tax burden.
Let's say the elasticity of demand is -2 and the elasticity of supply is -4. In absolute terms, both elasticities are equal, as they have the same value: 2. Since supply is twice as elastic as demand, this means that supply is 2 times as elastic as demand. Therefore, consumers would pay 2 times as much of the tax as producers.
If demand is less elastic than supply, consumers bear a greater share of the tax burden. An example statement could be 'Supply was 2 times as elastic as demand, and consumers paid 3 times as much of the tax as sellers.'
If the elasticity of demand is less than the elasticity of supply, this implies that demand is more inelastic compared to supply. Consequently, consumers will bear a larger portion of the tax burden. Without the specific numerical values for the elasticities and tax burdens, a hypothetical scenario could be stated as follows:
Supply was 2 times as elastic as demand. Consumers paid 3 times as much of the tax as sellers.
That statement would mean, for instance, if the elasticity of supply were -2.0 and the elasticity of demand were -1.0, supply would be twice as responsive to price changes as demand. In such a case, if the tax burden on consumers were $3 million and on sellers were $1 million, consumers would bear three times the tax burden of sellers.