if the demand elasticity for good X is 1.33 and the supply elasticity for X is...
if the demand elasticity for good X is 1.33 and the supply elasticity for X is .42 who will pay a greater share of a tax imposed on the market?
a) producers
b) consumers
c) the government
d) the tax will be shared equally between consumers and producers
Homework Answers
Ans: a ) producers
Explanation:
Here , the demand elasticity for good X is 1.33 , it means demand is elastic.
And the supply elasticity for good X is 0.42 , it means supply is inelastic.
So in this case the producers will pay greater share of a tax imposed on the market.
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