Because the demand curve is downward sloping (i. e., consumers cut back on smoking when cigarette prices go up) the seller is not able to transfer the entire burden of the tax on to the consumers. indeed sellers and buyers (same thing as consumers) share the burden. let x% be the consumer's share of the burden and y% be the seller's share. then,

Question

Business

Jadyn Mahoney

27 August, 05:31

Because the demand curve is downward sloping (i. e., consumers cut back on smoking when cigarette prices go up) the seller is not able to transfer the entire burden of the tax on to the consumers. indeed sellers and buyers (same thing as consumers) share the burden. let x% be the consumer's share of the burden and y% be the seller's share. then,

+5

Answers (1)

Know the Answer?

Marin · Answer 1

x = 50%; y = 50%

Because the demand curve is downward sloping and the seller is not able to transfer the entire burden of the tax on to the consumers. Indeed sellers and buyers share the burden. So it the x and y will be equal on 50%.