Which statement accurately describes how the tax burden is allocated?

Question

Accepted Answer

The way a tax burden is divided depends on the relative price elasticities of supply and demand, not on legal rules.

Answer

When a tax is imposed on a product considered essential by consumers, the sellers bear the largest share of the tax burden.

Answer

The tax burden is always borne by the group (buyers or sellers) who are legally responsible for paying the tax.

Answer

The tax burden primarily falls on the market participants (buyers or sellers) who are most likely to exit the market if prices change unfavorably.

Explanation