Question: 1.6.1 What effect does a $1 specific tax have on equilib rium price and quantity, and what is the incidence on consumers, if the following

1.6.1 What effect does a $1 specific tax have on equilib rium price and quantity, and what is the incidence on consumers, if the following is true:

a. The demand curve is perfectly inelastic.

b. The demand curve is perfectly elastic.

c. The supply curve is perfectly inelastic.

d. The supply curve is perfectly elastic.

e. The demand curve is perfectly elastic and the sup ply curve is perfectly inelastic.

Use graphs and math to explain your answers. (Hint:

See Solved Problem 2.6.) M

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