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Unformatted text preview: Perfectly elastic demand: the seller pays the entire tax. The more inelastic the demand, the larger is the buyers share of the tax. 3 Taxes Tax Division and Elasticity of Supply Perfectly inelastic supply: the seller pays the entire tax. Perfectly elastic supply: the buyer pays the entire tax. The more elastic the supply, the larger is the buyers share of the tax. Taxes Efficiency and Elasticity of Demand & Supply The greater the elasticity of demand and supply the greater the D.W.L. Perfectly inelastic supply or Perfectly inelastic demand: no D.W.L....
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- Fall '07