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Ch. 6 - Introduction to Taxes and SubsidiesWorksheetSee all chapters

# Elasticity and Taxes

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Sections
Introducing Taxes and Tax Incidence
Effects of Taxes on a Market
Elasticity and Taxes
Subsidies
The Laffer Curve
Quantitative Analysis of Taxes
Tax Efficiency
Tax Equity
###### The tax incidence to the consumer and producer depend on the price elasticity of each curve.

Concept #1: Elasticity and Taxes

Concept #2: Elasticity and Taxes: Perfectly Elastic Demand and Perfectly Inelastic Demand

Practice: A $1 per-unit tax levied on consumers of a good is equivalent to Practice: A tax imposed on consumers of a good: Practice: Suppose that a unit tax of$2 is imposed on producers with initial equilibrium of \$10. If the demand curve is vertical and the supply curve is upward-sloping, what will be the price faced by consumers after the tax?