Essay
Suppose the market for grass seed is expressed as:
Demand: Qᴰ = 100 - 2p
Supply: Qˢ = 3p
Price elasticity of supply is constant at 1.If the supply curve is changed to Q = 8p,price elasticity of supply is still constant at one.Yet with the new supply curve,consumers pay a larger share of a specific tax.Why?
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