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The following diagram depicts the demand and supply curves in the salt market. It also depicts the shift in the supply curve due to a
The following diagram depicts the demand and supply curves in the salt market. It also depicts the shift in the supply curve due to a 30% tax on the price of salt. Now suppose that the market demand curve for salt is less elastic than in the diagram. The equilibrium before tax is still at (Q*, P*). Let the post-tax equilibrium be denoted by (Q2 , P2) (not shown on the diagram). Based on this information, which of the following statements is correct? Market supply with tax R Market supply A px Price of salt P Demar Q1 Quantity of salt Select one: O a. Proportionally, more of the burden of the tax would be on the producer if the demand curve were less elastic. O b. None of the answers listed is correct. O c. For the outputs, Q1
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