If a tax is imposed on a market with elastic demand and inelastic supply, it is impossible to determine how the burden of the tax will be shared. buyers will bear most of the burden of the tax. sellers will bear most of the burden of the tax. the burden of the tax will be shared equally between buyers and sellers.

When a tax is imposed on a market with elastic demand and inelastic supply, buyers tend to bear most of the burden of the tax. This is because sellers, facing a rigid supply curve, are less able to reduce the quantity supplied in response to the tax. Since the demand is elastic, buyers are more sensitive to price changes and will decrease their quantity demanded significantly if prices rise too much, so sellers will likely raise prices, passing the tax burden onto buyers. In real-world scenarios, this tax incidence can lead to increased prices for consumers, while producers may not see much of a decline in the quantity sold due to their inelastic supply. In industries like agriculture, where producers cannot easily decrease production, this dynamic can significantly impact grocery prices.