Suppose the government applies a specific tax to a good where the demand elasticity, &, is...

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Suppose the government applies a specific tax to a good where the demand elasticity, &, is -1.8, and the supply elasticity, n, is 1.8. If a specific tax, t, of $2.75 was placed on the good, to the nearest cent, what is the price increase that consumers would pay? (round your answer to two decimal places). To the nearest cent, what is the price decrease that producers would pay? (round your answer to two decimal places). What is the tax incidence on consumers? (round your answer to two decimal places). Suppose the government applies a specific tax to a good where the demand elasticity, &, is -1.8, and the supply elasticity, n, is 1.8. If a specific tax, t, of $2.75 was placed on the good, to the nearest cent, what is the price increase that consumers would pay? (round your answer to two decimal places). To the nearest cent, what is the price decrease that producers would pay? (round your answer to two decimal places). What is the tax incidence on consumers? (round your answer to two decimal places).

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Part 1 The price increase that consumers would pay due to the specific tax can be calculated usin... View the full answer