Exhibit 14.7.

-Refer to Exhibit 14-7. In such a market, on whom does the tax incidence fall?

Name: Exhibit 14.7. -Refer to Exhibit 14-7. In such a market, on whom does the tax incidence fall?
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Question

Exhibit 14.7.

-Refer to Exhibit 14-7. In such a market, on whom does the tax incidence fall?

Quizplus · Accepted Answer

The tax incidence falls on both consumers and producers in this market. The price that consumers pay increases from P1 to P2, while the price that producers receive decreases from P1 to P3. Therefore, both consumers and producers share the burden of the tax.

Exhibit 14.7. -Refer to Exhibit 14-7. in Such a Market, on Whom