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Suppose a Supplier of a Good Has a Perfectly Inelastic

question 43

Essay

Suppose a supplier of a good has a perfectly inelastic supply curve.Now assume a unit tax is placed on the good and that the demanders of the good are legally required to pay it.Who will bear the burden of the tax,the supplier or the demanders or some combination? Draw a picture in explaining your answer.


Definitions:

Proposition

A statement or assertion that expresses a judgment or opinion.

Declarative Assertion

A statement that conveys information or expresses a fact openly and confidently.

Formulating Concepts

The process of creating and defining ideas, principles, or theories through abstract thinking and combining information.

Scholarly Work

Academic or intellectual work that involves rigorous research and scholarship, often contributing new knowledge to a particular field of study.

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