When a tax is imposed on an essential product, who is most likely to bear the majority of the tax burden?

Prices, Wages & Taxes MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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Subject
Prices, Wages & Taxeseconomics-mcqs › prices-wages-taxes
Published
30 May 2019
Last updated
28 May 2026

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Explanation

Taxes on essential goods tend to be passed on to consumers because demand for necessities is relatively inelastic. This means buyers are less sensitive to price changes, so they end up bearing a greater share of the tax burden compared to sellers.

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