Questions: The burden of a tax falls more heavily on the sellers in a market when a. demand is inelastic and supply is elastic b. demand is elastic and supply is inelastic c. both supply and demand are elastic d. both supply and demand are inelastic

The answer is the second one (b): demand is elastic and supply is inelastic.

Explanation for each option:

a. Demand is inelastic and supply is elastic: This scenario would result in the burden of the tax falling more heavily on the buyers rather than the sellers. When demand is inelastic, buyers are less sensitive to price changes, so they bear more of the tax burden.

b. Demand is elastic and supply is inelastic: In this case, the burden of the tax falls more heavily on the sellers. When supply is inelastic, sellers cannot easily change the quantity they produce in response to price changes, so they bear more of the tax burden.

c. Both supply and demand are elastic: If both supply and demand are elastic, both buyers and sellers can easily adjust to price changes, and the tax burden is more evenly distributed between them.

d. Both supply and demand are inelastic: When both supply and demand are inelastic, both buyers and sellers are less responsive to price changes, and the tax burden is also more evenly distributed between them.

In summary, the tax burden falls more heavily on the side of the market (buyers or sellers) that is less elastic. In this case, when demand is elastic and supply is inelastic, sellers bear more of the tax burden.