Suppose demand for good X is given by QD = 900- p/2 where p is the price and QD the quantity demanded. Supply is given by QS = p/4. Suppose 60 TL tax is imposed on each unit of X that is purchased. What is the burden of the tax? Explain the key factors that determine the incidence of the tax.

Suppose demand for good X is given by QD = 900- p/2 where p is the price and QD the quantity demanded. Supply is given by QS = p/4. Suppose 60 TL tax is imposed on each unit of X that is purchased. What is the burden of the tax? Explain the key factors that determine the incidence of the tax.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter6: Elasticity

Section6.4: The Relationship Between Taxes And Elasticity

Problem 3ST

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Suppose demand for good X is given by QD = 900- p/2 where p is the price and QD the quantity demanded. Supply is given by QS = p/4.
Suppose 60 TL tax is imposed on each unit of X that is purchased.
What is the burden of the tax? Explain the key factors that determine the incidence of the tax.

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