181 1 141 3 1 . 4 1 5 . 1 6 1 1 17 8. Why would government prefer to impose tax on goods with inelastic demand? Explain your answer using an example. 2marks Case 1 Case 2 Case 3 D S Price Price D Quantity Quantity Quantity 9. A new sales tax (for example $1 per piece) is introduced a. Who bears the tax in the cases 1, 2 and 3? 3marks b. Describe the relationship between price elasticity of demand and tax incidence. 2 marks 3 |Page