H11Controls - 39 Tax Incidence Tax tax incidence depends on...

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Tax Incidence Tax Incidence tax incidence depends on elasticities incidence on consumers increases when demand more price inelastic Quantity Price (per unit) S S´(+Tax) E Q E P E D i Q´´ ´´ P S E´´ P D ´´ D e P S ´ P D ´ 39 Tax Incidence Tax Incidence tax incidence depends on elasticities incidence on consumers increases when demand more price inelastic Quantity Price (per unit) S S´(+Tax) demand perfectly inelastic consumers bear entire burden of tax Tax D P E Q E E P D ´ ´= P S 39 S i S i ´(+Tax) Quantity Price (per unit) D Tax Incidence tax incidence depends on elasticities incidence on consumers increases when demand more price inelastic E Q E P E S e S e ´(+Tax) P S ´ P D ´ E´´ ´´ Q´´ P S ´´ P D demand perfectly inelastic consumers bear entire burden of tax incidence on producers increases when supply more price inelastic 40
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Price Controls Price Controls price controls --- distortion created price cannot ration scarce resources price floor - minimum price price ceiling -maximumprice Quantity
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H11Controls - 39 Tax Incidence Tax tax incidence depends on...

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