Consumers expressed outrage at the high price of chainsaws after Hurricane Andrew hit Florida and Louisiana, with newspaper editorials accusing suppliers of unconscionable price gouging. Use a supply and demand graph to assist in explaining the increase in the price of chain saws after Hurricane Andrew.
Definitions:
Tax Incidence
The distribution of the economic burden of a tax between buyers and sellers, depending on the elasticity of demand and supply.
Net Profits
The actual profit after working expenses not included in the calculation of gross profit have been paid.
Goods And Services
Refers to the tangible products (goods) and intangible items (services) produced and offered in an economy.
Average Tax Rate
The total tax paid divided by the total income, often expressed as a percentage.
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