Consider the market for dining at Mexican restaurants. Suppose the price elasticity of demand for Mexican food is 1.23 and the price elasticity of supply is 0.47. If the government imposes a tax on Mexican food, do consumers or producers pay most of the tax?
Why?

Question

Consider the market for dining at Mexican restaurants. Suppose the price elasticity of demand for Mexican food is 1.23 and the price elasticity of supply is 0.47. If the government imposes a tax on Mexican food, do consumers or producers pay most of the tax?
 Why?

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The Answer of Consider the market for dining at Mexican restaurants. Suppose the price elasticity of demand for Mexican food is 1.23 and the price elasticity of supply is 0.47. If the government imposes a tax on Mexican food, do consumers or producers pay most of the tax?
 Why?

Consider the Market for Dining at Mexican Restaurants