Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter P2, Problem 10KC
To determine
The impact when the demand curve is more elastic than the supply curve.
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Students have asked these similar questions
When demand is elastic
Draw a diagram and explain
how consumer burden is determined
how producer burden is determined
who pays the bigger burden of the tax
how tax affects the efficiency of the market
clearly explain and show the government tax revenue
clearly explain and show the deadweight loss
When supply is perfectly elastic, who bears the burden of tax?
Select one:
a. producers
b. consumers
c. producers and consumers
d. sellers
Government levied a tax on good A. The less elastic the demand is, the greater or the smaller the tax burden consumers bear?
Also, is the after-tax equilibrium quantity the greater or smaller?
Consumers’ tax burden: After-tax equilibrium quantity:
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Similar questions
- The more elastic the supply of a product, the more likely it is that the a.burden of a tax on the product will fall equally on both buyers and sellers. b.burden of a tax on the product will fall on sellers. c.deadweight loss of the tax will be smaller. d.burden of a tax on the product will fall on buyers.arrow_forwardRichard and Henry like soda drinks. Henry's demand for soda is: P=10-Q; the demand for Richard is P=5.5-0.5Q. The supply of soda cans is perfectly elastic at P=1. The government imposes a tax on soda cans equal to t=$1 per can. a) Which consumer will suffer the greater loss of consumer surplus in response of the tax? why?b) Would the government prefer all consumers to be like Henry or like Richard if the government wants to maximise tax revenue? Why? Accompany your answer with a diagram to illustrate your argument.arrow_forwardA tax is placed on beer and sellers have ended up bearing most of the burden of this tax. Why is this? the government has placed the tax on buyers the demand curve is more inelastic than the supply curve the supply curve is more inelastic than the demand curve the government has placed the tax on sellers.arrow_forward
- Daniel and Jacob like soda drinks. Jacob's demand for soda is: P=10-Q; the demand for Daniel is P=5.5-0.5Q. The supply of soda cans is perfectly elastic at P=1. The government imposes a tax on soda cans equal to t=$1 per can. a) Which consumer will suffer the greater loss of consumer surplus in response of the tax? why?b) Would the government prefer all consumers to be like Jacob or like Daniel if the government wants to maximise tax revenue? Why? Accompany your answer with a diagram to illustrate your argument.arrow_forwardWould consumer or producer carry the burden of tax if good is elastic? Show on a grapharrow_forwardIf the government places a tax of $500 on luxury cars, what happens in the market? Please assume demand and supply that are "normal" i.e. not completely elastic and not completely inelastic. Demand is downward sloping and supply upward sloping :) Question 7 options: The price goes up by less than $500, and quantity sold goes up The price goes up by less than $500, and quantity sold goes down The price goes up by more than $500, and quantity sold goes down The price goes up by more than $500, and quantity sold goes uparrow_forward
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