Figure 6-29
Suppose the government imposes a $2 on this market.
-Refer to Figure 6-29.The buyers and sellers will bear an equal share of the tax burden if the demand is

Question

Figure 6-29
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-29.The buyers and sellers will bear an equal share of the tax burden if the demand is

Quizplus · Accepted Answer

The tax burden is shared equally between buyers and sellers when the price elasticity of demand is equal to the price elasticity of supply. In this case, D1 and S1 indicate that both demand and supply are equally elastic.

Figure 6-29 Suppose the Government Imposes a $2 on This Market