Arrange the following steps in the process of understanding how taxation affects demand elasticity: A) Identify the elasticity of demand for a product B) Analyze the impact of taxation on quantity demanded C) Determine the tax burden on buyers and sellers D) Evaluate market dynamics post-taxation

To understand how taxation affects demand elasticity, you should start by identifying the elasticity of demand for a product, which tells you how sensitive consumers are to price changes. Once you know this, you can analyze how taxation influences the quantity demanded; for instance, if a tax raises prices significantly, consumers may buy less of that product if the demand is elastic. Next, you determine the tax burden on buyers and sellers to see who pays more of the tax burden, as this can affect their behavior in the market. Finally, you evaluate the market dynamics after the tax is imposed to understand the overall effect on supply, demand, and prices. For example, if a tax on soda leads to a large drop in sales, understanding these steps helps explain how the tax has shifted consumer behavior.