Elasticity Exercise

Notes: It is best not to calculate elasticity for this assignment using the midpoint formula approach.

Compare the supply elasticity and the demand elasticityby comparing the portion/percentage of the tax paid The more elastic pays the smaller portion/percentage. If portion/percentages equal, then elasticities equal at the equilibrium.

Part 1 Supply

Given below is a diagram (Figure 1) and a set of questions related to Figure 1.

Figure 1 Tax Collected from Producers Price S Incl. tax S (no tax) $3.50 $3.30 $3.00 $2.80 D 90 100 QuantityFigure 2 Tax Collected from Consumers Price S $3.30 $3.00 $2.80 $2.50 D D . . . Incl. tax No tax 90 100 Quantity