Suppose the Supply Curve Is Perfectly Inelastic and the Equilibrium

question 114

Essay

Suppose the supply curve is perfectly inelastic and the equilibrium price is $5 and equilibrium quantity is 7.If the government impose an excise tax of $1 per unit,what will be the new price and quantity traded? What is the total tax revenue and who pays the tax?

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Definitions:

1,3-Butadiene

A colorless, flammable gas with a mild odorous smell, used in the production of synthetic rubber and other polymers.

HOMO

Stands for Highest Occupied Molecular Orbital, the topmost energy level occupied by electrons in a molecule under normal conditions.

1,3-Butadiene

An elementary conjugated diene with a molecular composition of C4H6, employed in the manufacture of synthetic rubber as a monomer.

HOMO

Highest Occupied Molecular Orbital, the topmost energy level occupied by electrons in a molecule under normal conditions.