Question: Responding to a congressional proposal to impose a 5 percent
Responding to a congressional proposal to impose a 5 percent tax on elective cosmetic surgery, a spokesman for a company that pro-duces Botox said such a tax would result in “ a very marginal” increase on the $ 440 cost of a Botox procedure, but could have a larger effect on breast implant procedures that cost upward of $ 5,000 [ Richwine, 2009]. If this is correct, would the tax have a larger excess burden in the market for Botox procedures or in the mar-ket for breast implants? Organize your answer around Equation
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