The incidence of a tax:A) is a measure of the revenue the government receives from it.B) refers to who writes the check to the government.C) refers to how much of the tax is actually paid by consumers and producers.D) is a measure of the deadweight loss from the tax.

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Peyton Moldenhauer · Accepted Answer

Final Answer : C, Explanation :  The incidence of a tax refers to how much of the tax burden is actually paid by consumers and producers. This is determined by the elasticity of demand and supply for the taxed good. The government's revenue from the tax is not the incidence, but rather the tax revenue. The entity that writes the check to the government is not relevant to the incidence of the tax. Deadweight loss is a measure of the inefficiency caused by the tax and is not directly related to incidence.

The incidence of a tax:

A) is a measure of the revenue the government receives from it.
B) refers to who writes the check to the government.
C) refers to how much of the tax is actually paid by consumers and producers.
D) is a measure of the deadweight loss from the tax.

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