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1. Discuss the impact of the imposition of a tax (on the seller). What happens to the following? a. How does elasticity impact the incidence of a tax

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 36P: The equation for a supply curve is P=3Q8. What is the elasticity in moving from a price of 4 to a...

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Question

1. Discuss the impact of the imposition of a tax (on the seller). What happens to the following?

a. How does elasticity impact the incidence of a tax

2. Discuss two unintended effects of a price ceiling?

Video Definition Video Definition Government regulation setting a maximum price a business may charge for a given good or service. A price ceiling itself does not cause demand or supply to change. It is simply a mechanism used to set a price that can be legally charged in the market. Price ceilings are often implemented during times of crisis to avoid price gouging.

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