If the apple farmer can raise prices by an amount less than $1, then consumers and the farmer are sharing the tax burden. When the tax incidence falls on the farmer, this burden will typically flow back to owners of the relevant factors of production, including agricultural land and employee wages. Where the tax incidence falls depends (in the short run) on the price elasticity of demand and price elasticity of supply. Tax incidence falls mostly upon the group that responds least to price (the group that has the most inelastic price-quantity curve). If the demand curve is inelastic relative to the supply curve the tax will be disproportionately borne by the buyer rather than the seller. If the demand curve is elastic relative to the supply curve, the tax will be borne disproportionately by the seller. If PED = PES, the tax burden is split equally between buyer and seller. Tax incidence can be calculated using the pass-through fraction. The pass-through fraction for buyers is:  So if PED for apples is -0.4 and PES is 0.5 then the pass-through fraction to buyer would be calculated as follows:  So 56% of any tax increase would be "paid" by the buyer; 44% would be "paid" by the seller. From the perspective of the seller, the formula is:  Compared to previous phenomenas, elasticity of the demand and supply curve is an essential feature, that predicts how much the consumers and producers will be burdened in the specific case of taxation. General rule claims, that the steeper is demand curve and the flatter is supply curve, the more of the tax will bear by consumers and the flatter is demand curve and the steeper is supply curve, the more of the tax will be bear by producers. Because the producer is inelastic, they will produce the same quantity no matter the price. Because the consumer is elastic, the consumer is very sensitive to price. A small increase in price leads to a large drop in the quantity demanded. The imposition of the tax causes the market price to increase from "P without tax" to "P with tax" and the quantity demanded to fall from "Q without tax" to "Q with tax". Because the consumer is elastic, the quantity change is significant. Because the producer is inelastic, the price doesn't change much. The producer is unable to pass the tax onto the consumer and the tax incidence falls on the producer. In this example, the tax is collected from the producer and the producer bears the tax burden.