Question

Who would likely pay the majority of a per-unit tax in the market for fine, 18th century antiques buyers or sellers?

Answer 1

Solution:

The incidence of tax depends on the elasticity of demand and supply curves, which are determined by the product market in the question.

In the given question, the market which is being talked about is of 18th century antiques. Note that consumers of such goods as antiques are those who buy these goods out of interest and passion, meaning that these goods are luxurious (as specific to choice people). For luxury goods, the demand is relatively inelastic that is with change in the price of such goods, quantity demanded doesn't change much.

Under tax incidence (or in simpler terms, tax burden shared) the majority of tax burden is shared by less inelastic side of the market. We have already established above that the demand side is relatively inelastic or less elastic, thus majority of a per unit tax in 18th century antiques market is likely to be paid by buyers.