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Economics: A Contemporary Introduction 9th Edition by William McEachern
Edition 9ISBN: 9780538453745Economics: A Contemporary Introduction 9th Edition by William McEachern
Edition 9ISBN: 9780538453745 Exercise 2
Suppose a tax is imposed on a good with a perfectly elastic supply curve.
a. Who pays the tax?
b. Using demand and supply curves, show how much tax is collected.
c. How would this tax revenue change if the supply curve becomes less elastic?
a. Who pays the tax?
b. Using demand and supply curves, show how much tax is collected.
c. How would this tax revenue change if the supply curve becomes less elastic?
Explanation
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Tax incidence and supply elasticity
A t...
Economics: A Contemporary Introduction 9th Edition by William McEachern
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