A constant elasticity supply curve, Q Bp, intersects a constant elasticity demand curve, Q Ap , where A, B, , and are constants What is the incidence of a $1 specific tax Does your answer depend on where the supply curve intersects the demand curve Why ...

In each of the constant elasticity functions shown the exp ...

A constant elasticity supply curve, Q = Bp, intersects a constant elasticity demand curve, Q = Ap

Question:

A constant elasticity supply curve, Q = Bpη, intersects a constant elasticity demand curve, Q = Ap^ε , where A, B, η, and ε are constants. What is the incidence of a $1 specific tax? Does your answer depend on where the supply curve intersects the demand curve? Why?

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