3. Draw a figure showing that (a) given the supply of a commodity, the less sensitive...

3. Draw a figure showing that

(a) given the supply of a commodity, the less sensitive the quantity demanded is to price (i.e. the steeper the demand curve), the greater is the share of the tax paid by buyers and the smaller is the share paid by sellers. Label the area representing the buyers’ burden with “B” and the area representing the sellers’ burden with “C”

(b) given the demand for a commodity, the less sensitive the quantity supplied is to price (i.e. the steeper the supply curve), the smaller is the share of the tax paid by buyers and the larger is the share paid by sellers. Label the area representing the buyers’ burden with “B” and the area representing the sellers’ burden with “C”,

Expert Solution

Rahul Sunny answered 2 years ago

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