Concept
Version 7
Created by Boundless
Taxation Impact on Economic Output
Tax Incidence of Producer
When supply is inelastic but demand is elastic, the majority of the tax is paid for by the consumer. Since quantity demanded drops significantly in this scenario, the producer is forced to sell less.
Source
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"Tax incidence (producer)."
http://en.wikipedia.org/wiki/File:Tax_incidence_(producer).svg
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