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Question
In a market where supply and demand are both somewhat elastic, but demand is more elastic than supply, consumers will bear less of the burden of a tax because
a. consumers have a greater ability to change their behavior in response to the tax than producers do.
b. producers are more likely to be responsible for paying the tax out of pocket.
c. both parties have equal ability to change their behavior in response to the tax.
d. consumers will experience lower prices as a result of the tax.
e. producers have a greater ability to change their behavior in response to the tax than consumers do.
Answer
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