Concept #1: Elasticity and Taxes
Concept #2: Elasticity and Taxes: Perfectly Elastic Demand and Perfectly Inelastic Demand
Practice: A $1 per-unit tax levied on consumers of a good is equivalent to
Practice: A tax imposed on consumers of a good:
Practice: Suppose that a unit tax of $2 is imposed on producers with initial equilibrium of $10. If the demand curve is vertical and the supply curve is upward-sloping, what will be the price faced by consumers after the tax?