Concept:The burden of a tax falls more heavily on the side of the market that is less responsive to price changes.
Explanation:When a tax is imposed on a commodity, the seller's cost rises and the market price tends to go up.
If demand is fairly inelastic, buyers do not reduce their quantity demanded much when the price increases.
So the seller can pass a larger share of the tax on to the buyer through a higher price.
Hence, the buyer pays more of the tax than the seller.
If demand were elastic, the seller would bear most of the tax instead, because buyers would easily switch away.
A perfectly inelastic demand would make the buyer bear the whole tax, not just a greater part of it.
Therefore, when more of the tax is borne by the buyer, the commodity is said to have fairly inelastic demand.
Answer:C. Fairly inelastic demand