a)Show in four diagrams the incidence of an indirect (specific) tax in the case of elastic and inelastic demand and elastic and inelastic supply.b)Consider supply in the long run. Assume that a specific tax is imposed on a good that was previously untaxed. How will the incidence of this tax change as time passes? 1.(a) Show in four diagrams the incidence of an indirect (specific) tax in the case of elasticand inelastic demand and elastic and inelastic supply.(b) Consider supply in the long run. Assume that a specific tax is imposed on a good that waspreviously untaxed. How will the incidence of this tax change as time passes?

Burden of tax of producers and consumers depend on the elasticity of supply and demand . High…

Answered: (a) Show in four diagrams the incidence…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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a)Show in four diagrams the incidence of an indirect (specific) tax in the case of elastic and inelastic demand and elastic and inelastic supply.

b)Consider supply in the long run. Assume that a specific tax is imposed on a good that was previously untaxed. How will the incidence of this tax change as time passes?

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