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When demand is perfectly inelastic who bears the tax burden?
The consumer is the one that bears the tax burden in this case 100%.
Using the concept of elasticity explain how a tax on gasoline would affect firms and consumers Who would pay the larger burden of the tax?
First, a quick discussion on elasticity of demand:When demand for an item is perfectly elastic, as prices increase the demand for the item decreasesWhen demand for an item is perfectly inelastic as prices increase the demand for the item does not changeIn the real world, few items are perfectly elastic or perfectly inelastic. Gasoline is an interesting item when it comes to elasticity. Gas is nearly perfectly inelastic at some levels of consumption because most people need to use it to get to work. This is starting to change however because as technology develops alternative fuels gas may become much more elastic. At some levels of consumption gas becomes elastic, for example if prices are too high some people will choose to skip a vacation soas not to consume gas.Now to explain elasticity of demand and taxes:When demand is perfectly inelastic, all of the tax will be passed on to the consumer.When demand is perfectly elastic, all of the tax will be passed on to the to the producer.So now to answer the question as to who would pay the larger burden of the tax. Right now (11/2009) gasoline is much more inelastic than it normally is (although it usually is still quite inelastic). For this reason, the majority of the tax on gasoline will be paid by the consumer.
How does a tax a good affect the price paid by buyers the price received by sellers and the quantity sold?
it will totally depand upon elasticity of supply and demand if it is elastic then iten the tax paid will be by both however if it is inelastic then burden of tax will be laid upon buyer
Who ultimately bears the burden of a tax when it is imposed on a good?
The burden of a tax imposed on a good is ultimately borne by the consumers and producers of that good, as they end up paying higher prices or receiving lower profits.
When demand is more inelastic than the supply what happens to the burden of a tax?
the consumers pay a larger share of the tax
When demand is perfectly inelastic who bears the tax burden?
The consumer is the one that bears the tax burden in this case 100%.
Using the concept of elasticity explain how a tax on gasoline would affect firms and consumers Who would pay the larger burden of the tax?
First, a quick discussion on elasticity of demand:When demand for an item is perfectly elastic, as prices increase the demand for the item decreasesWhen demand for an item is perfectly inelastic as prices increase the demand for the item does not changeIn the real world, few items are perfectly elastic or perfectly inelastic. Gasoline is an interesting item when it comes to elasticity. Gas is nearly perfectly inelastic at some levels of consumption because most people need to use it to get to work. This is starting to change however because as technology develops alternative fuels gas may become much more elastic. At some levels of consumption gas becomes elastic, for example if prices are too high some people will choose to skip a vacation soas not to consume gas.Now to explain elasticity of demand and taxes:When demand is perfectly inelastic, all of the tax will be passed on to the consumer.When demand is perfectly elastic, all of the tax will be passed on to the to the producer.So now to answer the question as to who would pay the larger burden of the tax. Right now (11/2009) gasoline is much more inelastic than it normally is (although it usually is still quite inelastic). For this reason, the majority of the tax on gasoline will be paid by the consumer.
How does a tax a good affect the price paid by buyers the price received by sellers and the quantity sold?
it will totally depand upon elasticity of supply and demand if it is elastic then iten the tax paid will be by both however if it is inelastic then burden of tax will be laid upon buyer
Who ultimately bears the burden of a tax when it is imposed on a good?
The burden of a tax imposed on a good is ultimately borne by the consumers and producers of that good, as they end up paying higher prices or receiving lower profits.
When demand is more inelastic than the supply what happens to the burden of a tax?
the consumers pay a larger share of the tax
When the demand for a commodity is inelastic who bears the greater burden of the indirect tax?
When the demand for a commodity is inelastic, consumers bear a greater burden of the indirect tax. This is because inelastic demand means that consumers are less responsive to price changes; they will continue to buy nearly the same quantity even as prices rise due to the tax. Producers may be able to pass on most or all of the tax to consumers in the form of higher prices, resulting in a larger share of the tax burden falling on the consumers.
What is the importance of elasticity of demand and supply?
Elasticity of demand to firms are important because they represent the nature of the goods they are dealing in. For example if a firm produces goods with inelastic demand they will be able to earn high profits because even if they increase the price of the goods, since the change in demand will be less than the change in price. Also if there is a tax they will share less of the burden. This means they can keep prices high and not have to worry about a lot of things. However, if a firm were to produce goods with elastic demand, then they will have to make sure the price of the good remains low and if there is a tax they will be the ones who share the majority of the burden.
What is the burden of proof imposed on the defence in a criminal trial In England?
None. The crown must prove guilt beyond a reasonable doubt, just as in the U.S.
Are there any existing laws that should not be imposed upon citizens?
When there is no existing federal law, the Dormant Commerce Clause ... of its own citizens at the expense of out-of-state citizens is not a legitimate state objective. ... it will be upheld unless the burden imposed on such commerce is clearly.
What was the main reason the colonists resented the acts imposed by parliament?
The main reason that the colonists resented the acts imposed on them by Parliament is that they had no say in the creation of those acts. This is the issue of taxation without representation that you learn about in American history in school.
How does a tax levied on the sellers of a good shift the burden of taxation?
When a tax is imposed on sellers of a good, they often pass on the cost to consumers by raising prices. This shift in burden results in consumers paying more for the product, ultimately bearing the brunt of the tax.
How does incidence of taxation took place?
ELASTIC DEMAND-if Price of a commodity increases as result of tax, the demand for such goods decreases therefore the supplier Beyer's the tax burden
