Question

The following graph shows the daily market for wine. Suppose the government institutes a tax of $11.60 per price buyers pay and the price sellers receive

Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. 

Using the data you entered in the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your resuits in the following table. 

The burden of the tax falls more heavily on the _______  elestic side of the market.

Answer 1