When elasticity of demand and elasticity of supply are equal, the burden of tax ____________.

lies more on the buyer

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lies more on the seller

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lies equally on the buyer and seller

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all of the above are false

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Solution

The correct option is D lies equally on the buyer and seller
Tax incidence or tax burden does not depend on where the revenue is collected, but on the price elasticity of demand and price elasticity of supply.

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