Now suppose that the price elasticity of demand is 1, price elasticity of supply is 2, and a 25 % excise tax is levied on consumers. Which of the following changes in a market will reduce the burden of the tax on consumers? Elasticity of demand rises to 2. Nothing will change the burden of the tax. Elasticity of demand falls to 0. Taxing authorities levy the tax on suppliers.

Now suppose that the price elasticity of demand is 1, price elasticity of supply is 2, and a 25 % excise tax is levied on consumers. Which of the following changes in a market will reduce the burden of the tax on consumers? Elasticity of demand rises to 2. Nothing will change the burden of the tax. Elasticity of demand falls to 0. Taxing authorities levy the tax on suppliers.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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