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Suppose Supply curve has one elasticity (S 1 ), but Demand curves have different elasticities, as shown in the graph below. Indicate Producer tax burden
Suppose Supply curve has one elasticity (S 1 ), but Demand curves have different elasticities, as shown in the graph below. Indicate Producer tax burden and Consumer tax burden, by adding some more lines/points, if necessary. Clearly show the difference between Producer tax burden and Consumer tax burden in both cases: inelastic demand (D') and elastic demand (D).Do you agree/disagree with the idea that some policy markers often propose a suggestion to the government to impose a Sin tax, i.e. taxation on smoking cigarette or tobacco, usage of nightclub, etc., because this kind of tax would direct to the sin behaviors? How? Should the government collect this tax in the form of an Earmarked tax? Why
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