The supply for gasoline is more elastic than the demand of gasoline. If gasoline is taxed $1 per gallon, how will the tax be divided between the buyers and sellers? The sellers will pay more of the tax than the buyers. sellers will pay the entire tax. buyers will pay more of the tax than the sellers. sellers and buyers will split the tax evenly.

The supply for gasoline is more elastic than the demand of gasoline. If gasoline is taxed $1 per gallon, how will the tax be divided between the buyers and sellers? The sellers will pay more of the tax than the buyers. sellers will pay the entire tax. buyers will pay more of the tax than the sellers. sellers and buyers will split the tax evenly.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section: Chapter Questions

Problem 14QP

See similar textbooks

Similar questions

The reason which determines the elasticity of tax burden on buyers and sellers.
EFFECT OF A TAX ON BUYERS AND SELLERS
The elasticity of demand for chocolate chip cookies is 0.6 and the elasticity of supply for these cookies is 1.9. If a tax is imposed on purchases of chocolate chip cookies, then the consumers would pay more of the tax. consumers would pay the entire tax because their demand is less elastic than the producers' supply. tax would be equally shared by the consumers and the producers. producers would pay more of the tax.
Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively. Suppose the government imposes a per-unit tax of $45 Some economists believe that a sales tax, in general, is undesirable. Explain. Despite this, why do most countries still impose a tax on cigarette? Explain plausible arguments.
A tax on the sellers of coffee will increase the price of coffee paid by buyers,
Suppose an economist estimates the price elasticity of demand for sugary drinks is -4.2, while its price elasticity of supply is 1.2. If the government decides to impose a per-unit tax of $9 per can of sugary drinks sold, how would the market price of sugary drinks be affected? Show your calculation
Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively. Suppose the government imposes a per-unit tax of $45 on the cigarette sellers. By how much would buyers share the tax burden respectively? Show your calculation.
What are pros and cons to increasing the gasoline tax?
How does a tax on a good affect the price paid by buyers, price receive by sellers, and the quantity sold?
Price $3.50 3 2.50 $0.25 $1.00 1,200 1,500 $0.50 Supply The figure above illustrates a market for gasoline with a $1 tax imposed on the buyers. What is the seller's tax incidence? Between $0.00 and $1.00 depending on elasticity of supply. Demand Demand + $1 tax Quantity
How much of the tax per cell phone is paid by producers and how much is paid by consumers?
Suppose that the Australian government imposes a sales tax on a product and both buyers and sellers share the burden of the If the price elasticity of demand for the product is perfectly inelastic. Which of the following is true? Select one: a. Sellers would pay more of the tax than buyers. b. Buyers would pay all of the tax. c. Buyers and sellers would share the tax burden equally. d. Sellers would pay all the tax.