When the price elasticity of demand is high and the price elasticity of supply is low, the burden of a tax falls primarily on

Q: Let Q=2P be supply and Q=20-2P be demand. The equilibrium quantity with a tax of 2 is.........

A: Demand: - Demand is the relationship between the quantity demanded and the price of a good. There is…

Q: The incidence of indirect taxes on suppliers is greatest when (a) supply is elastic and demand is…

A: The incidence of taxes examines the distribution of money burden of taxes on the economy.  In case…

Q: The more elastic the supply of a product, the more likely it is that the a. burden of a tax on the…

A: When the supply is more elastic and there is an increase in the taxes which will cause the supply…

Q: A tax on demand shifts ________________ , and the burden of the tax falls on _______________.…

A: Taxes are the amount charged by the government inorder to maintain the economic value of the…

Q: The price elasticities of supply and demand affect     both the size of the deadweight loss from a…

A: The elasticity refers to the responsiveness of the quantity demand due to change in the price.…

Q: Compared to consumers, producers will lose the greater amount of surplus from a tax if supply is…

A: The correct Option is (A) That is the supply is more elastic than the demand

Q: When supply and demand are equally elastic:     producers carry the majority of the tax…

A: When supply and demand elasticities are same, the tax burden borne by both buyers and sellers are…

Q: When the price elasticity of supply is relative to the price elasticity of demand, then sellers bear…

A: Since you have posted multiple independent questions in the same request, we will solve the first…

Q: Q97 Before the imposition of a tax, the equilibrium price and quantity are $15 and 100,…

A: Q97 Before the imposition of a tax, the equilibrium price and quantity are $15 and 100,…

Q: Clarify with the help of elasticity analysis how the tax incidence theory helps to trace the final…

A: The economics as a study is based upon the basic idea that the resources which are present with the…

Q: In this problem, p is the price per unit in dollars and q is the number of units. If the weekly…

A:

Q: Which of the following statements are correct? The statutory or legal incidence of a tax determines…

A: The tax can be divided into two categories such as per unit tax and lumpsum tax. Any tax results in…

Q: Imposing a sales tax on sellers of a product has an effect that is similar to which of the…

A: Implementation of sales tax on the sellers will affect the supply of the goods.

Q: By using only one graph, show and explain who bears the burden and excess burden of an excise…

A: As shown in diagram before tax the equilibrium price is determined by the intersection of supply and…

Q: If the goverment wants to raise tax revenue and shift most of the tax burden to the consumers, it…

A: Tax incidence measures the burden of tax shares between consumer and seller.  It depends on the…

Q: With the use of diagrams and by including consumer and producer surplus in your answer, explain…

A: A tax incidence is define as the division of a tax burden which has to be shared in between the…

Q: Given a demand curve of P = 70 - 1.5Q and a supply curve of P = 2 + 0.5Q, with a tax of 44, solve…

A: With the imposition of tax, the price paid by buyers increases which lead to decrease in consumer…

Q: supply is less elastic than demand when a market is in equilibrium, then taxing consumers for every…

A: Elasticity of demand depicts how much consumer responds with the change in the price level.

Q: The excess burden is an increasing function of a tax. True, false or uncertain: the excess burden of…

A: As the rate of tax increases, its burden on the one bearing it rises and thus it can be rightly said…

Q: Suppose demand for good X is less elastic than demand for good Y. Suppose the government wants to…

A: The correct option is  A. Good X  Since the demand for X is less elastic.

Q: Alcohol, tobacco, and gasoline have inelastic demand, so the buyers of these items pay most of the…

A: The alcohol, gasoline, tobacco have inelastic demand, that is less than 1, it means when the price…

Q: The actual burden of a tax falls most heavily on the side of the market that is more elastic. O…

A: with the imposition of tax, there is increase in price paid by buyerspTwhereas decrease in price…

Q: The incidence of a unit tax depends on the elasticities of supply and demand.  With appropriate…

A: The markets for goods, and services operate on the basis of the demand forces, where the demand…

Q: Suppose the supply curve for cars is more elastic than the demand curve for cars.  If the government…

A: Tax incidence can be shifted only through sale and purchase transaction.  Share of tax borne by the…

Q: There is an _________ relationship between tax rate and supply of a good

A: The tax imposed by the government and the subsidy lend by the government all impacts the cost of…

Q: If a government simplified its tax system the likeliest result would be Group of answer choices a…

A: A government imposes a tax on market participants as a charge of using public services or as a…

Q: Supply of a good is more elastic than the demand for the good. Who will bear the larger burden of…

A: Taxation refers to per unit tax imposed by the government of the country on some particular goods or…

Q: Suppose the government imposes a $10 per unit tax on a good with a demand and a supply depicted in…

A: An excise tax is a per unit tax on commodity.

Q: What is the tax incidence of an excise tax when demand is highly inelastic and highly elastic?

A: When appropriate the government can intervene in a market by levying excise tax in order to…

Q: Question 2 Given the following information Qd = 240 – SP Qs = P Where Qd is the quantity demand, Qs…

A: Let Pb is the price for buyerand Ps is the price for sellerNow government imposed a per unit tax of…

Q: Show in four diagrams the incidence of an indirect (specific) tax in the case of elastic and…

A: Answer: Introduction: Incidence of tax: incidence of tax refers to the burden shared by producer and…

Q: If the demand for private planes is elastic compared to the supply, then the burden of a luxury tax…

A: In an economy, various taxes are imposed on different products to reduce income inequality or get…

Q: How a tax burden is divided between consumers and producers is called tax incidence. Consumers bear…

A: Tax incidence depends on price elasticity of demand and supply.

Q: What happens to the deadweight loss and taxrevenue when a tax is increased?

A: Taxes refer to the legal proceedings and the formalities that need to be addressed by every citizen…

Q: When the price of demand is high and the price elasticity is low the burden of a tax falls primarily…

A: Elasticity of demand depicts how much consumer responds with the change in price.

Q: Assuming that supply is somewhat elastic, the burden of a per unit tax is borne more by consumers…

A: The elasticity of supply and demand determines the amount of the  burden of tax bore by a consumer…

Q: When the absolute value of price elasticity of demand is greater than the absolute value of price of…

A: The customers will bear a larger fraction of the tax imposed if the demand (dd) is going to remain…

Q: The efficiency loss of imposing an excise tax is due to: a. Paying a higher price per unit. b.…

A: The efficiency loss occurs due to the over production or underproduction. On the other hand, an…

Q: A tax targeted to reduce consumption of a good by a specific quantity will raise the most revenue…

A: A tax targeted to reduce consumption of a good by a specific quantity will raise the most revenue…

Q: How does elasticity affect the burden of a tax? Justify your answer using supply and demand…

A: The economic effect of taxation are manifold. This include micro effect on distribution of income…

Q: Assume the marginal tax rate for income above $25000 has risen to 30 percent. If the tax rate for…

A: Marginal tax rate is applied in brackets of income. It is the additional tax paid out of additional…

Q: Market A Market B P(dollars) P (dollars) Q (units) Q (units) 5,000 5,000 Consider two markets…

A: ANS Tax incidence will be larger if the change in quantity demanded due to the tax is greater. PED…