The accompanying graph depicts a hypothetical market for salt. Suppose that an excise or commodity tax is levied on consumers in an attempt to curb blood pressure problems. Show the effect of the tax by shifting the appropriate curve(s). 10 9 Market for Salt Who has the larger tax burden? The tax burdens are equal Producers (suppliers) Consumers (buyers) Why is the tax burden as you described in in the question above? Demand is less elastic than supply. Supply is less elastic than demand. Both supply and demand are perfectly elastic. Demand is more elastic than supply. Consumers are the ones paying the tax. Price (S/kilogram) 3 2 1 8 7 00 4 0 0 1 2 3 4 D 5 6 7 T Quantity (in kilograms) S 8 е 10 10

The accompanying graph depicts a hypothetical market for salt. Suppose that an excise or commodity tax is levied on consumers in an attempt to curb blood pressure problems. Show the effect of the tax by shifting the appropriate curve(s). 10 9 Market for Salt Who has the larger tax burden? The tax burdens are equal Producers (suppliers) Consumers (buyers) Why is the tax burden as you described in in the question above? Demand is less elastic than supply. Supply is less elastic than demand. Both supply and demand are perfectly elastic. Demand is more elastic than supply. Consumers are the ones paying the tax. Price (S/kilogram) 3 2 1 8 7 00 4 0 0 1 2 3 4 D 5 6 7 T Quantity (in kilograms) S 8 е 10 10

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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