According to the tax-incidence rule in economics, which side of a market bears more of a tax?

According to the tax-incidence rule in economics, the less elastic side of a market bears more of a tax.

Elasticity measures how strongly quantity responds to a change in price. Buyers with inelastic demand reduce purchases relatively little when the price rises, while sellers with inelastic supply reduce production relatively little when the price they keep falls. Because the less responsive side has fewer practical alternatives, it tends to absorb a larger share of the tax burden.

Legal responsibility for remitting a tax does not determine its economic incidence. A tax may be collected from sellers but still be partly reflected in higher prices paid by buyers. Conversely, a tax collected from buyers can reduce the net price received by sellers.

The split depends on relative—not absolute—elasticities. A tax also usually lowers the quantity traded and creates deadweight loss. In the long run, supply may become more elastic as firms adjust capacity, changing the distribution of the burden.