In general, if demand is more elastic, who tends to bear less of the tax burden?

When demand is more elastic, consumers are more responsive to changes in price. This means that if a tax is imposed, consumers will reduce their quantity demanded significantly in response to a price increase caused by the tax. As a result, producers cannot pass on much of the tax burden to consumers without losing a substantial number of sales.

In this scenario, the producers bear a larger share of the tax burden. Since prices are relatively sensitive to changes for elastic demand, suppliers are limited in their ability to raise prices without drastically affecting demand for their product. Therefore, when tax burdens are shared between consumers and producers, those in a situation where demand is more elastic will typically see consumers bearing less of the burden, as they will adjust their buying behavior more significantly in response to price increases.

This dynamic highlights the importance of elasticity in determining how tax burdens are distributed between different market participants. Thus, consumers, facing the option to substitute goods or reduce consumption, effectively bear less of the tax burden when demand is elastic.