In competitive markets firms supply quantity of the product equals to the level at which the price of the good equals marginal cost (supply … See more

Imagine a $1 tax on every barrel of apples a farmer produces. If the farmer is able to pass the entire tax on to consumers by raising the price by $1, the product (apples) is price … See more

All factors, which was derived on the tax incidence and competitive market might be used also in the case of market for labor. The key role of the paying the tax burden is still elasticity of the curves. Thus it does not matter, whether the tax is imposed on supplier … See more

Through the budget constraint might be seen, that uniform tax on wages and uniform tax on consumption have an equivalent impact. Both taxes shift the budget constraint to the left. New line will be characterized by same slope as the initial (parallelism). See more

Compared to previous phenomena, elasticity of the demand and supply curve is an essential feature that predicts how much the consumers and producers will be burdened in the … See more

A market with perfect competition is very rare. More of the market is said to be imperfect competition such as monopoly, oligopoly See more

The supply and demand for a good is deeply intertwined with the markets for the factors of production and for alternate goods and services … See more