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Unformatted text preview: ice cream cones on the shelf? P >P in the presence of a tax, true enough- but P isnt equal to P + tax because the demand curve has a slope. The price goes up, but not by the full amount of the tax = tax incidence- the share of the tax paid by one of the two parties in the transaction. Inc. Cons.- Incidence on the consumer/tax paid =P - P Inc. Prod.- Incidence on the producer/tax paid Example:...
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This note was uploaded on 04/18/2008 for the course ECO 2023 taught by Professor O'gorman during the Spring '08 term at South Florida Community College.
- Spring '08