Essentially none of the savings from removing the federal ad valorem tax were passed on to consumers for motion picture admissions and club dues (Brownlee and Perry, 1967; see Question 4.17). List the conditions (in terms of the elasticities or shapes of supply or demand curves) that are consistent with the incidence of the taxes falling entirely on firms. Use graphs to illustrate your answer.

Data From Questions 4.17:-

On July 1, 1965, the U.S. government eliminated its ad valorem taxes on many goods and services. By comparing the prices from before and after this change, we can determine how much the price fell in response to the tax's elimination. When the tax was in place, the tax per unit on a good that sold for \(p\) was \(\alpha p\). If the price fell by \(\alpha p\) when the tax was eliminated, consumers must have been bearing the full incidence of the tax. The entire amount of the tax cut was passed on to consumers for all commodities and services Brownlee and Perry (1967) studied. Taxes had been collected at the retail level (except for motion picture admissions and club dues) and excise taxes had been imposed at the manufacturer level for most commodities, including face powder, sterling silverware, wristwatches, and handbags. List the conditions (in terms of the elasticities or shapes of supply or demand curves) that are consistent with consumers bearing the full incidence of the taxes. Use graphs to illustrate your answer.