Consider the market for rubber bands,a. Lf this market has very elastic supply andvery inelastic demand, how would the burdenol a tax on rubber bands be shared betweenconsumers and producers? Use the tools ofconsumer surplus and producer surplus in youranswer.b. II this market has very inelastic supply and veryelastic demand, how would u,c burden of a taxon rubber bands be shared between consumersand producers? Contrast your answer with youranswer to part (a).
Consider the market for rubber bands,a. Lf this market has very elastic supply andvery inelastic demand, how would the burdenol a tax on rubber bands be shared betweenconsumers and producers? Use the tools ofconsumer surplus and producer surplus in youranswer.b. II this market has very inelastic supply and veryelastic demand, how would u,c burden of a taxon rubber bands be shared between consumersand producers? Contrast your answer with youranswer to part (a).
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
Section: Chapter Questions
Problem 4PA
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Question
Consider the market for rubber bands,
a. Lf this market has very elastic supply and
very inelastic demand, how would the burden
ol a tax on rubber bands be shared between
consumers and producers? Use the tools of
answer.
b. II this market has very inelastic supply and very
on rubber bands be shared between consumers
and producers? Contrast your answer with your
answer to part (a).
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