Based on Exhibit 4, which statement accurately describes who bears the greater share of the tax burden?

Show Answers

Consumers bear more of the tax since their demand is less elastic compared to supply.Producers bear a larger share of the tax because their supply is more elastic than demand.Consumers shoulder a bigger portion of the tax because their demand is more elastic than supply.Producers carry a greater portion of the tax burden because their supply is less elastic than demand.

Explanation

The tax burden falls more heavily on sellers when their supply is relatively inelastic compared to demand, meaning they cannot easily reduce quantity supplied in response to the tax. Therefore, producers end up paying a larger share of the tax.