Calculate the percentage of the tax borne by the demander and supplier in each of the following cases:Instructions: Enter your responses rounded to the nearest whole number. Elasticityof demandElasticityof supplyPercent borne by demanderPercent borne by suppliera.ED = 0.1ES = 0.5 % %b.ED = 1.0ES = 2.0 % %c.ED = 1.3ES = 0.9 % %d.ED = 1.9ES = 0.7 % % e. Summarize your findings regarding relative elasticity and tax burden.Consumers bear a greater portion of the tax burden because consumers choose to buy the good.Whichever group (producers or consumers) has the lower elasticity bears the greater portion of the tax burden.Whichever group (producers or consumers) has the higher elasticity bears the greater portion of the tax burden.Producers usually bear a greater portion of the tax burden because the government generally levies more taxes on producers.

The fraction of tax borne by the demanded = ES/(ED+ES) Similarly, for supplier = ED/(ED+ES) A) ED =…

Answered: Calculate the percentage of the tax…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

Calculate the percentage of the tax borne by the demander and supplier in each of the following cases:

Instructions: Enter your responses rounded to the nearest whole number.

	Elasticity of demand	Elasticity of supply	Percent borne by demander	Percent borne by supplier
a.	E_D = 0.1	E_S = 0.5	%	%
b.	E_D = 1.0	E_S = 2.0	%	%
c.	E_D = 1.3	E_S = 0.9	%	%
d.	E_D = 1.9	E_S = 0.7	%	%

e. Summarize your findings regarding relative elasticity and tax burden.

Consumers bear a greater portion of the tax burden because consumers choose to buy the good.
Whichever group (producers or consumers) has the lower elasticity bears the greater portion of the tax burden.
Whichever group (producers or consumers) has the higher elasticity bears the greater portion of the tax burden.
Producers usually bear a greater portion of the tax burden because the government generally levies more taxes on producers.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions