If the government imposes a tax on a product with inelastic demand, how is the tax burden likely to be distributed between consumers and producers?

When the government imposes a tax on a product with inelastic demand, it means that consumers will still buy the product even if the price goes up. Since they really need the product and are less sensitive to price changes, they are likely to bear most of the tax burden. For example, if a tax is added to a necessary medication, people will continue to buy it despite the higher cost because they need it for their health. Producers, on the other hand, may not lose as many sales, so they can pass much of the tax onto consumers in the form of higher prices. This shows that when demand is inelastic, consumers end up paying more of the tax than producers.