Elucidate why the tax burden will not actually fall

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Reference no: EM1354058

Suppose the demand for beer is perfectly inelastic (i.e., vertical), and the supply of beer is elastic. Suppose someone suggests that we should place a heavy beer tax on beer to punish the evil beer companies. Producers will be made to pay a tax for each beer sold. Use a graph to show why the tax burden will not actually fall on the people that this person wants to punish.

Reference no: EM1354058

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