Final answer:
The per-unit tax burden on buyers is influenced by the elasticity of demand and predominantly affects consumers in the case of inelastic demand, resulting in higher prices paid by the buyers.
Step-by-step explanation:
The per-unit burden of the tax on buyers can be determined through the concept of tax incidence, which is the manner in which a tax burden is divided between consumers and producers. In markets where demand is relatively inelastic, as in the case of tobacco, the tax burden mainly falls on the buyers. This results in buyers paying a significantly higher price post-tax (Pc) compared to the initial equilibrium price (Pe).
When examining elasticity and tax incidence, it is essential to consider how the elasticity of demand and supply affects the division of the tax burden. A more inelastic demand curve indicates that buyers are less sensitive to price changes and will absorb more of the tax burden, leading to higher prices paid by consumers. Conversely, a more elastic supply curve would imply sellers absorb a greater portion of the tax burden, resulting in a lower price for buyers compared to a less elastic supply situation.
In summary, the per-unit tax burden on buyers is directly influenced by the inelasticity of the demand curve for the product being taxed. The burden manifests as higher prices paid by consumers.