With the use of diagrams and by including consumer and producer surplus in your answer, explain fully how the price elasticity of demand for a product influences the incidence of an indirect tax on that product.

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: When a tax is placed on the sellers of cell phones, the size of the cell phone market a. and the…

A: Given:- Tax placed on cell phone seller To determine:- Size of cell phone market=?

Q: The government imposes a per-unit tax of 4 sheqles on banana and demand for banana is elastic.…

A: An excise tax is a tax on each unit of a commodity. Consumers and producers share the burden or…

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: Consider the market for rubber bands. a.If this market has very elastic supply and very inelastic…

A: Economics as a subject deals with the allocation of scarce resources among humans with unlimited…

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: In a market where the government has imposed a tax on goods, where does tax revenue fall? Explain…

A: The tax on any commodity will lessen the price realized by the sellers and raise the price paid by…

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: Which of the following is the best description of “deadweight loss”? A. The decrease in total…

A: Deadweight loss is a cost to the society which is because of inefficiency in a market.

Q: A tax on demand shifts and the burden of the tax falls on the demand curve only; on demanders only.…

A: A tax on demand implies a tax on goods which leads to a fall in the demand and supply so it shifts…

Q: QD = 160 -5P QS = -11 + 4P In addition, the government imposed a $3.00 tax on the buyer.…

A: The price and quantity demanded to have an inverse relationship between them. It means that quantity…

Q: A specific tax on sellers will *       a)shift the supply curve to the right.       b)shift the…

A:

Q: It is known that Qd = 80-2P and Qs = -10 + P Question: a. Draw it in a graph! b. If the government…

A: Qd = 80-2P Qs = -10 + P

Q: how inelastic supply effect on tax

A: Taxes are defined as the amount of compulsory payment made to the government by the citizens of the…

Q: Some economists have argued that taxation is one of the causes of economic inefficiency. They claim…

A: There is a mindset believing that reducing the marginal tax would spur the growth of the economy.…

Q: Suppose the price elasticity of demand for luxury boats is zero. Explain, with the use of a diagram,…

A: Price elasticity: It refers to the change in the price of goods and services. The more change in…

Q: Economists disagree on whether labor taxes cause small or large deadweight losses. This disagreement…

A: The tax is a unilateral payment made by the people towards the government for various purposes such…

Q: The inverse demand function of chicken wings is p=50- 4g. The supply function of chicken wings is…

A: Given Demand function p = 50 - 4q -------(1) Supply function q = p ---------(2) At market…

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: When supply is perfectly elastic, who bears the burden of tax? Select one: a. producers b.…

A: The burden of the tax falls on that side of the market (consumer or producer) which is relatively…

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: Using demand curve approach, explain how a commodity tax incurs excess burden

A: In a market, tax burden refers to the additional cost bear by the market participant when government…

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

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

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: 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: Draw a diagram to show the effect of a tax on producers. Show one demand curve and two supply curves…

A: Taxes are used by all governments, whether national or municipal, to fund public initiatives such as…

Q: Using a hypothetical demand and supply equations explain what would happen if government imposes an…

A: An Indirect tax is an assessment/tax imposed by a governing body, indirectly from the consumer via…

Q: If the burden of a tax on sugary drinks is borne mostly by consumers, it must be the case that: a)…

A: The demand curve of a good shows the quantity demanded of a good at various possible price levels…

Q: Draw a supply-and-demand diagram of the market for liquor without the tax. Show the price paid by…

A: Answer - Thank you for submitting the questions.But, we are authorized to solve one question at a…

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: How does a Tax on Production affect a negatively sloped Demand curve or the Supply Curve? The supply…

A: When there is a change in the price of good, it makes movement along the demand or supply curve.…

Q: The incidence of a tax: - refers to who writes the check to the government.   - is a measure of the…

A: In Economics, incidence of tax explains which party ultimately bears the burden of tax. It expalins…

Q: Draw a diagram to show the effect of a tax on producers. Show one demand curve and two supply curves…

A: The demand and supply curve before tax are given below. The intersection of demand and supply gives…

Q: Identify whether the statements about the economics of taxes are true or false. a. An excise tax…

A: Identify whether the statements about the economics of taxes are true or false.   a. An excise tax…

Q: the market for candy, researchers have estimated the following demand and supply curves.  Demand:…

A: Equilibrium is achieved at the output level where Qs equals Qd

Q: if the demand curve is very inelastic and the supply curve is very elastic in the market then…

A: Elasticity is a monetary idea used to gauge the adjustment of the total amount requested of a…

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

A: The tax burden is higher on the party that is inelastic towards the price of the good because they…

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: Which of the following statements correctly describes the relationship between the size of the…

A: When the government imposes per unit of tax then the burden of tax is shared by the buyer and seller…

Q: Demand of product X = 2 P = 2000 - 4 Q Supply of product X = P = 100 + 3 Q Sales tax per unit = $…

A: "Since you have posted a question with multiple sub-parts, we will solve the first three subparts…

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…

Q: How would I solve this question?: suppose demand for cigarettes is inelastic and supply of…

A: Elasticity refers to an economic instrument that calculates the change in the quantity demanded a…

Q: When an excise tax is imposed on sellers, the of the tax. curve shifts by the amount supply;…

A: Correct answer "supply; upward".