The Incidence of Per-Unit Tax - Who Takes on the "Real" Burden

Many people believe the businesses simply pass on the full burden of per-unit taxes (think cigarette taxes or gasoline taxes) onto the consumer. Certainly, business want to pass the full burden to the consumer, but the realities of the market characteristics won't allow this. What market characteristics, the relative elasticities of the supplier (the PES value) and demander (the PED value). That's right, who incurs the burden of a per-unit tax is determined by relative responsiveness of the buyer and seller to price changes. This video should make things much clearer when it comes to this important economics concept (upon which market participant does the burden of per-unit taxes fall).

This video is made for 1st year college students or AP/IB Economics students. It focuses on foundational economic concepts.

Видео The Incidence of Per-Unit Tax - Who Takes on the "Real" Burden канала Econbusters