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What determines how the burden of a tax is divided between buyers and sellers Why

Chapter 6, Problem Questions for Review 6.7

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QUESTION:

What determines how the burden of a tax is divided between buyers and sellers? Why?

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QUESTION:

What determines how the burden of a tax is divided between buyers and sellers? Why?

ANSWER:

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The factors that determine the burden of tax between buyers and sellers are the elasticities

of demand and supply.

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