“Taxes create a wedge between price buyers pay and price sellers sell, but the incidence of...

“Taxes create a wedge between price buyers pay and price sellers sell, but the incidence of a tax depends on the price elasticities of supply and demand, and NOT necessarily who the government requires to pay the tax from their pocket. Discuss this statement and provide an example that shows the tax burden is shared by both buyers and sellers “in some proportion, and not necessarily 50-50”.

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Rahul Sunny answered 2 years ago

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