Question: Our third question is, Does the equilibrium or the incidence of the tax depend on whether the tax is collected from producers or consumers? Surprisingly,
Our third question is, “Does the equilibrium or the incidence of the tax depend on whether the tax is collected from producers or consumers?” Surprisingly, in the supply-and-demand model, the equilibrium and the incidence of the tax are the same regardless of whether the government collects the tax from producers or from consumers.
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