宏微观经济学第五讲供给需求与政府政策--s.ppt

First, the equilibrium quantity is the quantity where PB – PS = $30. This quantity is 80. Next, to find PB, start at Q=80 and go up to the demand curve to see that PB = $110. To find PS, start at Q=80 and go up to the supply curve to see that PS = $80. To find incidence, just compare PB and PS to the no-tax equilibrium price, $100. * We have just seen that tax incidence is not affected by whether the government makes buyers or sellers pay the tax. So what, then, does determine tax incidence? Turns out it’s elasticity – specifically, the price elasticities of supply and demand. There are two cases: 1) supply is more price-elastic than demand (this slide), and 2) demand is more price-elastic than supply (next slide). When supply is more price-elastic than demand, sellers are relatively more responsive to changes in price, and the supply curve is less steep than the demand curve. Buyers have relatively fewer alternatives, so they have to “eat” most of the price increase caused by the imposition of the tax. As the textbook puts it, sellers can more easily leave the market in response to the tax than can buyers. Thus, buyers are stuck bearing most of the burden of the tax. * The size of the tax is the same in this diagram as in the one on the preceding slide. When demand is more price-elastic than supply, buyers are relatively more price-sensitive, and the demand curve is less steep than the supply curve. Buyers have relatively more alternatives, so they can avoid most of the tax. Sellers are less flexible, so they have to “eat” a greater share of the price increase caused by the tax. From the textbook: Buyers can more easily leave the market than sellers in response to the tax. Thus, sellers end up with most of the burden of the tax. * This case study shows students an interesting real-world example of the material they just learned. If you’re pressed for time, it is probably safe to skip it and let students read it on their own