13)

I. If the price of Pappy Van Winkle Bourbon retails for $150 per bottle and the State Board of Equalization decides to tax spirits at 10%, illustrate a graph and explain if demand is relatively elastic, who bears most of the tax and why.Be sure to label the graph and explain equilibrium prices before and after tax.

II. Now, illustrate and explain if sellers of the bourbon are elastic, who bears the brunt of the tax and why.Be sure to label the graph and explain equilibrium prices before and after tax.