Asked by Stephanie Matos on Jul 06, 2024

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The formula Es/(Es - Ed) is used to calculate the:

A) deadweight loss from price support programs.
B) increase in consumer surplus from a price ceiling.
C) fraction of a specific tax that is passed through to consumers.
D) none of the above

Specific Tax

A fixed amount taxed per unit of a good or service, as opposed to a percentage of the price.

Fraction

A numerical quantity that is not a whole number, represents a part of a whole, typically written with a numerator and a denominator separated by a slash.

Consumers

Individuals or households that use goods and services generated within the economy.

  • Clarify the influence of elasticity on tax allocation and outcomes in the marketplace.
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Verified Answer

MR
marco RomeroJul 09, 2024
Final Answer :
C
Explanation :
This formula is used to calculate the fraction of a specific tax that is passed through to consumers. It involves the elasticity of supply (ES), the elasticity of demand (U), and the shifts in supply and demand curves (B1s, B1d) before and after the tax.