lectur20-page8

Lectur20-page8 - to the consumer B If the demand curve was perfectly elastic the entire tax would be paid by the producer.

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Notice that P c - P e < tax. Therefore, the tax is not completely passed to the consumer. The producer bears some of the burden of the tax. A) If the demand curve was perfectly inelastic, the entire tax would be passed
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Unformatted text preview: to the consumer. B) If the demand curve was perfectly elastic, the entire tax would be paid by the producer....
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This note was uploaded on 12/29/2011 for the course ECO 210 taught by Professor Malls during the Fall '10 term at SUNY Stony Brook.

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