Arrange the following steps in the correct order to understand how tax incidence affects consumer behavior in relation to elasticity of demand: A) An increase in tax is imposed on good X; B) Consumers adjust their purchasing habits based on the elasticity of demand; C) The tax burden is distributed between consumers and producers; D) The market price of good X changes as a result of the tax imposition.

To understand how tax incidence affects consumer behavior, we start with step A, where an increase in tax is imposed on good X. This leads to step D, where the market price of good X changes because producers may pass some of the tax cost onto consumers. Next, we reach step C, where we see how the tax burden is shared between consumers, who pay higher prices, and producers, who receive lower revenue. Finally, in step B, consumers adjust their purchasing habits based on the elasticity of demand; if demand is elastic, they may buy less of good X, while if it is inelastic, they might continue buying it despite the higher price. For example, if the tax causes the price of a popular soft drink to rise significantly, consumers might switch to a cheaper brand if they view the drink as a luxury rather than a necessity.