Question

What determines how the burden of tax is divided between buyers and sellers? Why?

Answer 1

The elasticity of demand and the elasticity of supply decides how the tax burden is divided among the supplier and the customer.

Step-by-step explanation:

Elasticity refers to how sensitive the demand or the supply is comparatively to relative changes in the price. This is the major factor that decides the change in the demand and supply once the price increases as a result of the taxes.

Answer 2

Step-by-step explanation:

Taxation is the means by which the government gets most of its revenue so it is the duties of private or publicly owned organizations and also the citizen to pay their taxes used by the government to fund all its projects. the taxes generated by the government are then divided among buyers and sellers.

The elasticity of demand is the main determinant of how burden of tax is divided between buyers and sellers.