a)Show in four diagrams the incidence of an indirect (specific) tax in the case of elastic and inelastic demand and elastic and inelastic supply.b)Consider supply in the long run. Assume that a specific tax is imposed on a good that was previously untaxed. How will the incidence of this tax change as time passes? 1.(a) Show in four diagrams the incidence of an indirect (specific) tax in the case of elasticand inelastic demand and elastic and inelastic supply.(b) Consider supply in the long run. Assume that a specific tax is imposed on a good that waspreviously untaxed. How will the incidence of this tax change as time passes?

Burden of tax of producers and consumers depend on the elasticity of supply and demand . High…

Answered: (a) Show in four diagrams the incidence…

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter6: Demand And Elasticity

Section: Chapter Questions

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a)Show in four diagrams the incidence of an indirect (specific) tax in the case of elastic and inelastic demand and elastic and inelastic supply.

b)Consider supply in the long run. Assume that a specific tax is imposed on a good that was previously untaxed. How will the incidence of this tax change as time passes?

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