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The burden of a tax is shared by producers and consumers. Under what conditions will consumers pay most of the tax? Under what conditions will producers pay most of it? What determines the share of a subsidy that benefits consumers?
The burden of a tax and the advantages of a subsidy rely on the elasticities of demand and supply. Determine if the ratio of the elasticity of demand to the elasticity of supply is small, the burden of the tax falls basically on consumers. Alternatively, if the ratio of the elasticity of demand to the elasticity of supply is large, the burden of the tax falls basically on producers. Likewise, the benefit of a subsidy accrues mainly to consumers (producers) if the ratio of the elasticity of demand to the elasticity of supply is small (large).
How would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth Plastics and give your views to increase the profit.
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help me withh the calculation concept of the point where the firm is indifferent
After determining the expected cash flows and appropriate interest rate, the last step in the valuation process is to find the total PV of all cash flows. The PV
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