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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%.
When tax is imposed on motels or hotels and demand were slightly elastic and supply inelastic who would be stuck with the tax burden?
.com when tax is imposed on motels or hotels and demand were slightly elastic and supply inelastic,the tax burden would strike on the consumer who suffers what ever outcome.
What goods or services might a tax increase be hardest to pass on to consumers?
a product with elastic demand
How generally bears most of a sales tax when the demand for the good taxed is inelastic?
the consumer
Who generally bears most of a sales tax when the demand for the good taxed is inelastic?
the consumer
When demand is perfectly inelastic who bears the tax burden?
The consumer is the one that bears the tax burden in this case 100%.
When tax is imposed on motels or hotels and demand were slightly elastic and supply inelastic who would be stuck with the tax burden?
.com when tax is imposed on motels or hotels and demand were slightly elastic and supply inelastic,the tax burden would strike on the consumer who suffers what ever outcome.
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
What goods or services might a tax increase be hardest to pass on to consumers?
a product with elastic demand
How generally bears most of a sales tax when the demand for the good taxed is inelastic?
the consumer
Who generally bears most of a sales tax when the demand for the good taxed is inelastic?
the consumer
Who generally bears most of a sales tax when the demand of the good taxed is inelastic?
the consumer
Who generally bears most of a sales tax when the demand for a good taxed is inelastic?
the consumer
A state government wants to increase the taxes on cigarettes to increase tax revenue This tax would only be effective in raising new tax revenues if the price elasticity of demand is?
elastic
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.
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
