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What will happen if New York State will apply tax on sales of Green T-shirts? Explain...

What will happen if New York State will apply tax on sales of Green T-shirts? Explain from a point of elasticity of demand.

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If New York imposes a tax on the sales of Green T shirt then the incidence of the tax will fall on the most inelastic variable be it demand or the supply of the goods.

if the demand for green tshirt is more inelastic as compared to the supply then consumer will be bearing the burden of the taxes and if supply is more inelastic as compared to the demand then the supplier will be bearing the taxes in the market. this will anyway increase the amount that the consumer are paying more than before and suppliers receive less than before.

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