The statutory incidence of an excise tax of $50 dollars is placed on the seller of a good but the actual incidence of the tax falls primarily on the consumer of the good. Answer the following: 1. Explain why the consumer is paying the larger portion of the excise tax. 2. What is the anticipated impact on the firm's total revenue?
The statutory incidence of an excise tax of $50 dollars is placed on the seller of a good but the actual incidence of the tax falls primarily on the consumer of the good. Answer the following: 1. Explain why the consumer is paying the larger portion of the excise tax. 2. What is the anticipated impact on the firm's total revenue?
Chapter6: Elasticities
Section: Chapter Questions
Problem 20P
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![The statutory incidence of an excise tax of $50 dollars is placed on the seller of a good but the
actual incidence of the tax falls primarily on the consumer of the good. Answer the following:
1. Explain why the consumer is paying the larger portion of the excise tax.
2. What is the anticipated impact on the firm's total revenue?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffe562549-5e94-4cba-8d63-8a30fb017df2%2F07d7c2f6-4c29-4b50-b331-8a3f8ac0b310%2Fmbekzaa_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The statutory incidence of an excise tax of $50 dollars is placed on the seller of a good but the
actual incidence of the tax falls primarily on the consumer of the good. Answer the following:
1. Explain why the consumer is paying the larger portion of the excise tax.
2. What is the anticipated impact on the firm's total revenue?
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