Question: The initial equilibrium is e, where the linear supply curve intersects the linear demand curve. Show the welfare effects of imposing a specific tax (.

The initial equilibrium is e, where the linear supply curve intersects the linear demand curve. Show the welfare effects of imposing a specific tax (. Now suppose the demand curve becomes flatter, but still goes through point e, so that it is more elastic at e than originally. Discuss how the tax affects the equilibrium, CS, PS, welfare, and DWL differently than with the original demand curve?

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