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uppose the government decides to impose a $10 tax on each bag purchased. Also, assume that the demand for bags is perfectly inelastic, whereas the
uppose the government decides to impose a $10 tax on each bag purchased. Also, assume that the demand for bags is perfectly inelastic, whereas the supply curve is upward-sloping. As a result of the tax, which of the following happens to the price consumers pay for a bag? (Hint: The difference between the post-tax price of the seller and the post-tax price of the buyer is the tax rate, whereas the burden on consumers/producers can be calculated as the extent by which the consumer's/producer's price changes from the pre-tax equilibrium price
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