Suppose supply is P= 4 + (1/4)Qs and demand is P= 58 ―(1/2)Qs. At a glance, can you tell whether supply or demand is more price elastic in equilibrium? How? What does this tell you about who will pay more of a tax on this product

Suppose supply is P= 4 + (1/4)Qs and demand is P= 58 ―(1/2)Qs. At a glance, can you tell whether supply or demand is more price elastic in equilibrium? How? What does this tell you about who will pay more of a tax on this product

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 7SQP: Suppose a movie theater raises the price of popcorn 10 percent, but customers do not buy any less...

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The equilibrium occurs where the demand and supply forces are equal. The burden of tax is shared between buyer and seller based on the elasticities of demand and supply.

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