Suppose the government were to tax all car wash businesses in your town.Assume that the demand for car washes is perfectly elastic,demand for car wash employees is perfectly elastic in the short run,and the supply and demand of capital (i.e.,the car wash equipment)is elastic (but not perfectly so)in the short run and perfectly elastic in the long run.According to general equilibrium tax incidence analysis,______ bear the tax in the short run and ________ bear the tax in the long run.

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The Answer of Suppose the government were to tax all car wash businesses in your town.Assume that the demand for car washes is perfectly elastic,demand for car wash employees is perfectly elastic in the short run,and the supply and demand of capital (i.e.,the car wash equipment)is elastic (but not perfectly so)in the short run and perfectly elastic in the long run.According to general equilibrium tax incidence analysis,______ bear the tax in the short run and ________ bear the tax in the long run.

Suppose the Government Were to Tax All Car Wash Businesses