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2.f Elasticity and the CDUIDICERB equilibrium Consider the post-CDVID. postCERB equilibrium. If there were a further small increase in the wholesale cost of opioids, who
2.f Elasticity and the CDUIDICERB equilibrium Consider the post-CDVID. postCERB equilibrium. If there were a further small increase in the wholesale cost of opioids, who would end up paying for most of it the buyers or the seller? Briey explain your reasoning and back up your answer with calculations. [Hint: This is a tax incidence question. 1I"ou have everything you need to calculate the price elasticity of supply and price elasticity of demand at the post-CD'H'ID, post-EERE equilibrium, using the calculus denitions of elasticity. Once you have those, you can easily calculate the burdens on the buyers and on the sellers from a small increase in seller cost} Who would pay for most of the added cost? [Briefly explain your reasoning and show your work.]
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