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If the inverse demand function is p=a-bQ and the inverse supply function is given by p=c+dQ, show that the incidence of a specific tax t per unit...

This question was answered on Jan 27, 2013. View the Answer
If the inverse demand function is p=a-bQ and the inverse supply function is given by p=c+dQ, show that the incidence of a specific tax t per unit falling on consumers is b/(b+d)=n/(n-e).

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The total change in P= bt/(b+d) whereas tax is t .... View the full answer

This question was asked on Jan 26, 2013 and answered on Jan 27, 2013.

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