Consider the daily market for burritos in Sydney. The following graph displays the effect of a positive per$-$unit tax on burritos.

Taxesnew.png

The following definitions are important to answer this question:

Tax burden on buyers $=$ price buyers pay after tax is levied $-$ price buyers pay before tax is levied

Tax burden on sellers $=$ price sellers receive before tax is levied $-$ price sellers receive after tax is levied.

$($a$)$ Compute both the tax burden $($measured in dollars per burrito$)$ on both buyers and sellers.

Tax Burden

Buyers $

$[$ Select $]$

Sellers $

$[$ Select $]$

$($b$)$ In this case, buyers bear

$[$ Select $]$

burden of the tax than sellers. This result suggests that the demand was relatively

$[$ Select $]$

elastic than supply at the equilibrium before the tax.