Questions

Only if either demand or supply was either completely elastic or inelastic will the tax burden fall entirely on either the buyer or the seller. Between these 2 extremes, tax incidence varies continuously from a perfectly inelastic supply or perfectly elastic demand, where the sellers assumes the entire burden of the tax to the perfectly elastic supply or perfectly inelastic demand where the buyers bear the entire burden. To better see how the elasticity of supply and demand affects tax incidence, consider a 20% tax on a can of soda. Suppose the government decides that the buyer should pay the 20% tax. Does this mean that the buyers will be paying 20% more, or will sellers have to share some of the tax burden? Since higher prices decrease demand, regardless of the reason for the higher prices, sellers will share some of the burden. How much of the burden will be determined by the elasticity of supply and demand for the product?

‘Sitting on the fence’ is the correct idiom used. It is used to describe a person’s lack of decisiveness, neutrality or hesitance to choose between two sides in an argument or a competition, or inability to decide due to lack of courage. Thus, the sentence is grammatically and contextually correct. Thus, the correct formation would be, ‘Decide one way or the other; you can’t be sitting on the fence forever’.

National Water Academy (formerly known as Central Training Unit) was set up in Central Water Commission Opens in a new window by the Ministry of Water Resources, RD and GR, opens in a new window Govt. of India in the year 1988, to impart training to the in-service engineers of various Central/State organizations involved in the Development & Management of Water Resources. It was established under USAID assistance and strengthened with the subsequent assistance received from the World Bank.

It is located at Pune