Assume the supply elasticity of a product is 1 and the price elasticity of demand is 2.

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Assume the supply elasticity of a product is 1 and the price elasticity of demand is 2. To alleviate the effects of a negative externality, the government places a $2 per unit tax on this market, who will bear the larger burden of the tax?

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Microeconomics An Intuitive Approach with Calculus

ISBN: 978-0538453257

1st edition

Authors: Thomas Nechyba

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Posted Date: Mar 01, 2024 09:57 PM

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Assume the supply elasticity of a product is 1 and the price elasticity of demand is 2.

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To determine who will bear the larger burden of the tax we need to compare the elasticities of suppl... View the full answer

Microeconomics An Intuitive Approach with Calculus

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