When a tax is imposed on an essential product, who is most likely to bear the majority of the tax burden?

Show Answers

Sellers will carry most of the tax cost.Sellers will bear the full tax burden.Buyers will shoulder the larger portion of the tax.The tax burden will be shared equally between buyers and sellers.None of the above.

Explanation

Taxes on essential goods tend to be passed on to consumers because demand for necessities is relatively inelastic. This means buyers are less sensitive to price changes, so they end up bearing a greater share of the tax burden compared to sellers.