# Taxes

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##### Intros

###### Lessons

**Taxes Overview:**__Tax Incidence__- The division of tax burden
- 3 Cases

__Effects of Taxes__- Taxes on Sellers
- Taxes on Buyers
- Conclusion

__Tax Incidence and Elasticity of Demand & Supply__- Perfectly inelastic demand curve
- Perfectly elastic demand curve
- Perfectly inelastic supply curve
- Perfectly elastic supply curve

##### Examples

###### Lessons

**Understanding Effects of Taxes on Buyers and Sellers**

You have the following information:

Chocolate bars (dollars)

Quantity demanded (thousands per day)

Quantity Supplied (thousands per day)

1

6

4

2

5

5

3

4

6

4

3

7

5

2

8

- If chocolate bars are not taxed, what is the price of a chocolate bars and how many are bought?
- If sellers are taxed $2 dollar a chocolate bar, what is the price? How many are sold? Who pays the taxes?
- If buyers are taxed $2 dollar a chocolate bar, what is the price? How many are bought? Who pays the taxes?

- The demand function for laptops is
*P*= 300 - 2*Q*, and the supply function is*P*= 100 + 3*Q*. **Understanding Tax Incidence and Elasticity of Demand & Supply**

Suppose the demand curve for candy is perfectly inelastic, and a tax is imposed.- The demand curve is perfectly elastic, and the supply curve is perfectly inelastic. Suppose the equilibrium price is $5, and the equilibrium quantity is 100.