When market become unfavorable

The two panels of Figure 6-9 show a general lesson about how the burden of a
tax is divided: A tax burden falls more heavily on the side of the market that is less elastic.
Why is this true? In essence, the elasticity measures the willingness of buyers
or sellers to leave the market when conditions become unfavorable. A small elasticity
of demand means that buyers do not have good alternatives to consuming
this particular good. A small elasticity of supply means that sellers do not have
good alternatives to producing this particular good. When the good is taxed, the
side of the market with fewer good alternatives cannot easily leave the market and
must, therefore, bear more of the burden of the tax.
But we also have to say that in many cases you will just
have to grin and bear it. The need to add risk to increase potential
returns and the opportunities offered by investing
abroad overwhelm concerns about the diminished benefits from
diversification.