a)Show in four diagrams the incidence of an indirect (specific) tax in the case of elastic and inelastic demand and elastic and inelastic supply.b)Consider supply in the long run. Assume that a specific tax is imposed on a good that was previously untaxed. How will the incidence of this tax change as time passes? 1.(a) Show in four diagrams the incidence of an indirect (specific) tax in the case of elasticand inelastic demand and elastic and inelastic supply.(b) Consider supply in the long run. Assume that a specific tax is imposed on a good that waspreviously untaxed. How will the incidence of this tax change as time passes?

Burden of tax of producers and consumers depend on the elasticity of supply and demand . High…

Answered: (a) Show in four diagrams the incidence…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 27CTQ: Can you think of an industry (or product) with near infinite elasticity of supply in the short term?...

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a)Show in four diagrams the incidence of an indirect (specific) tax in the case of elastic and inelastic demand and elastic and inelastic supply.

b)Consider supply in the long run. Assume that a specific tax is imposed on a good that was previously untaxed. How will the incidence of this tax change as time passes?

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