Consider an Excise Tax Imposed on Daily Parking Charges in the Downtown

Multiple Choice

Consider an excise tax imposed on daily parking charges in the downtown of a small city.Before the imposition of the tax,equilibrium price and quantity are $15 and 100 cars parked.(P = $15,Q = 100) .The city government imposes a tax of $3 per car parked per day.Market equilibrium adjusts to P = $16 and Q = 95.Which of the following statements about the burden of the tax is correct?

A) Supply is more elastic relative to demand and therefore more of the burden falls on the consumer.
B) Supply is more elastic relative to demand and therefore more of the burden falls on the seller.
C) Supply is less elastic relative to demand and therefore more of the burden falls on the consumer.
D) Supply is less elastic relative to demand and therefore more of the burden falls on the seller.