Question

In case of forward shifting of a tax burden it lies on _________

a) Producer

b) Consumer

c) Worker

d) firm​

Answer 1

Answer:

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Answer 2

In case of forward shifting of a tax burden it lies on b) Consumer.

Forward shifting of a tax burden definition

Forward shifting occurs when the burden is wholly borne by the consumer of the item or service in issue, rather than the supplier—for example, an excise tax on luxuries that raises the price to the purchaser.

3 ways of shifting the tax burden

• The shifting of tax burdens is linked to changes in costs.
• Tax transfer has varied features in the three scenarios of stable, growing, and diminishing expenses.
• For commodities with fixed costs, the buyer may bear the entire tax burden.

Hence, Forward shifting occurs when the burden is wholly borne by the consumer