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

Consider the daily market for burritos in Sydney. The following graph displays the effect of a positive per-unit tax on burritos.
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 $
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Sellers $
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(b) In this case, buyers bear
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burden of the tax than sellers. This result suggests that the demand was relatively
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elastic than supply at the equilibrium before the tax.

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