In a competitive market, there is currently no tax, and the equilibrium price is $40. The market

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In a competitive market, there is currently no tax, and the equilibrium price is $40. The market has an upward-sloping supply curve. The government is about to impose an excise tax of $5 per unit. In the new equilibrium with the tax, what price will producers receive and consumers pay if the demand curve is
a) Perfectly elastic
b) Perfectly inelastic
Illustrate your answers graphically.
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Microeconomics

ISBN: 978-0073375854

2nd edition

Authors: Douglas Bernheim, Michael Whinston

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