56. When the supply is more elastic than demandA. The tax incidence falls on the buyersB. The tax burden is less on the sellersC. Both (a) and (b)D. None of the above
option B
The tax incidence depends on the relative price elasticity of supply and demand. When supply is more elastic than demand, buyers bear most of the tax burden. When demand is more elastic than supply, producers bear most of the cost of the tax.