Draw supply and demand curve and answer the following questions: (a) Suppose the supply of tobacco is elastic and the demand for tobacco is inelas- tic. If an excise tax is levied on the suppliers of tobacco, will the incidence of the tax fall mostly on consumers or mostly on producers? (b) If the demand is relatively more inelastic than before, will the DWL rise or fall? Will tax revenue from the tobacco tax fall or rise?

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Q: None

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Q: part C D

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A: given equilibrium price = 5 $ tax = 0.50 $ after tax price = 5.25 $ price seller receives = 4.75 $

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A: Correct option is C.

Q: What is an excise tax?

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A:

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