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Question

Using a graph, show the impact of sales tax on product X in immediate and long run market equilibrium. Clearly

indicate consumer's and producer's burden of tax on the graph. Assume that all other factors remain constant and that the market demand curve is inelastic.

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Document 89_3.jpg

Immediate
Long Term
Price consumer
Share
Price
Si
S
Consumer
share A
Producy
Qty
Qty
Producer
share

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