PRICE 16 14 12 10 00 6 4 Graph (a) Demand 1 2 3 45 QUANTITY Supply (Refer to Graph (a)) Total surplus without the tax is O $32, and total surplus with the tax is $16 $16, and total surplus with the tax is $12 $16, and total surplus with the tax is $16 O $32, and total surplus with the tax is $12 PRICE 16 14 12 10 876 432 Graph (b) Demand 2 3 4 5 6 QUANTITY Supply 7

PRICE 16 14 12 10 00 6 4 Graph (a) Demand 1 2 3 45 QUANTITY Supply (Refer to Graph (a)) Total surplus without the tax is O $32, and total surplus with the tax is $16 $16, and total surplus with the tax is $12 $16, and total surplus with the tax is $16 O $32, and total surplus with the tax is $12 PRICE 16 14 12 10 876 432 Graph (b) Demand 2 3 4 5 6 QUANTITY Supply 7

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 20RQ: Under which circumstances does line tax burden fall entirely on consumers?

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