Suppose that the demand for apples is perfectly elastic and the government levies a tax on apple producers.Assume that the supply of apples is neither perfectly elastic nor perfectly inelastic.
(a)How will the price paid by consumers change? Is this change bigger or smaller than the price change that would result if the demand for apples were not perfectly elastic?
(b)How will the quantity of apples consumed change because of the tax? Is this change in quantity larger or smaller than the change that would result if the demand for apples were not perfectly elastic?
(c)Explain the significance of your answers in both part (a)and part (b)in terms of how the tax affects the welfare of consumers in the apple market.

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The Answer of Suppose that the demand for apples is perfectly elastic and the government levies a tax on apple producers.Assume that the supply of apples is neither perfectly elastic nor perfectly inelastic.
(a)How will the price paid by consumers change? Is this change bigger or smaller than the price change that would result if the demand for apples were not perfectly elastic?
(b)How will the quantity of apples consumed change because of the tax? Is this change in quantity larger or smaller than the change that would result if the demand for apples were not perfectly elastic?
(c)Explain the significance of your answers in both part (a)and part (b)in terms of how the tax affects the welfare of consumers in the apple market.

Suppose That the Demand for Apples Is Perfectly Elastic and the Government