Consider the Market for Gasoline, a Good with a Relatively

Multiple Choice

Consider the market for gasoline, a good with a relatively low elasticity of demand. Who will bear the majority of a tax imposed on gasoline?

A) It depends on the tax rate at the time the gasoline is sold.
B) Sellers will bear the majority of the tax, as long as supply is more elastic than demand.
C) Buyers will bear the majority of the tax, as long as demand is less elastic than supply.
D) No one will bear the majority of the tax; the tax burden will be borne equally by both buyers and sellers