Introduction This is an individual assignment. The objective of this assignment is to understand the concept of Demand and Supply and elasticity. Students are required to submit a report on the assignment question given below. Assignment Question Suppose that the government decided to impose tax on petrol. What would happens to the demand for petrol as well as the demand for other goods due to this effect? Who would suffer more due to this tax? Where relevant, use charts, diagrams, and data etc. • Use supply and demand diagrams to illustrate what happened to the equilibrium relative price and quantities of these items. Relate this to Adam Smith’s notion of the invisible hand. • Illustrate the consumer and producer surplus before and after the tax.

Answer rating: 100% (QA)

Due to imposition of tax supply curve shifts upward by taxed amount Due to this price of petrol and ... View the full answer