IB DP Microeconomics · HL
Tax incidence: who really pays?
Apply a per-unit tax, then change how steep each curve is. The legal payer doesn't decide the economic burden — elasticity does.
- Burden split
- 56% consumers · 44% producers
- Consumers now pay
- 35.0
- Producers now receive
- 26.0
- Quantity (was 60)
- 50
- Government revenue
- 450
Steepen the demand curve and watch the gold consumer share grow: whoever finds it harder to walk away — the relatively more inelastic side — bears more of the tax. The two shaded rectangles together are the government's revenue.