UPLOAD A DRAWN PICTURE (however you're able like you did for discussion 1.) Draw the market...

UPLOAD A DRAWN PICTURE (however you're able like you did for discussion 1.) Draw the market for yachts, elastic demand, inelastic supply. Impose a tax on buyers of yachts, after all they’re rich and can afford it. Label: the without tax price and quantity, the price buyers pay after the tax, the price sellers receive after the tax, tax revenue, and deadweight loss. Was this program successful in taxing rich yacht buyers?

Expert Solution

Lesser the elasticity,greater the burden of tax.

Since supply is inelastic,the burden of tax will be shifted to the suppliers,and buyers will bear lesser burden of the tax.

Price Buyers' pay-Pb

Price suppliers receive-Ps

Tax revenue-PdFLPs

Shaded triangle-DWL

Rahul Sunny answered 2 years ago

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