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Review:Steeper Curve: less elastic Flatter Curve: more elastic MR=MCChapter 6 Taxes and Subsidies: Tax = Price paid by buyers – price received by sellersSubsidy = price received by sellers – price paid by buyers*When demand is more elastic than supply, demanders pay less of the tax than sellers. When supply is more elastic than demand, suppliers pay less of the tax than buyers* Elasticity = EscapeCommodity Tax: taxes on goods; Ex: fuel, liquor, cigarettes; raises revenue and creates DWLChapter 7 The Price System:Great Economic Problem: problem of how toarrange our limited resources to satisfy as many of our wants as possible. The price of a good contains information about: The value of the good to consumers and the cost of producing the good. Speculation: the attempt to profit from futureprice changes. *can narrow price fluctuations*Futures: standardized contracts to buy or sell specified quantities of a commodity or financial instrument at a specified price with