[经济学]Ch09-TheAnalysisofCompetitiveMarkets.pptVIP

112 114 115 Chapter 9 * Incidence of a Specific Tax Four conditions that must be satisfied after the tax is in place (cont.): QD = QS Difference between what consumers pay and what buyers receive is the tax If we know the demand and supply curves as well as the tax, we can solve for PB, PS, QD and QS Chapter 9 * Incidence of a Specific Tax In the previous example, the tax was shared almost equally by consumers and producers If demand is relatively inelastic, however, burden of tax will fall mostly on buyers Cigarettes If supply is relatively inelastic, the burden of tax will fall mostly on sellers Impact of Elasticities on Tax Burdens Quantity Quantity Price Price S D S D Q0 P0 P0 Q0 Q1 Pb PS t Q1 Pb PS t Burden on Buyer Burden on Seller Chapter 9 * The Impact of a Tax or Subsidy We can calculate the percentage of a tax borne by consumers using pass-through fraction ES/(ES - Ed) Tells fraction of tax “passed through” to consumers through higher prices For example, when demand is perfectly inelastic (Ed = 0), the pass-through fraction is 1 – consumers bear 100% of tax Chapter 9 * The Effects of a Tax or Subsidy A subsidy can be analyzed in much the same way as a tax Payment reducing the buyer’s price below the seller’s price It can be treated as a negative tax The seller’s price exceeds the buyer’s price Quantity increases Chapter 9 * D S Effects of a Subsidy Quantity Price P0 Q0 Q1 PS Pb Like a tax, the benefit of a subsidy is split between buyers and sellers, depending upon the elasticities of supply and demand. Subsidy Chapter 9 * Effects of a Subsidy The benefit of the subsidy accrues mostly to buyers if ED /ES is small The benefit of the subsidy accrues mostly to sellers if ES /ES is large As with a tax, using supply and demand curves, and the size of the subsidy, one can solve for resulting prices and quantities * Transactions Costs Transactions costs can also create a wedge between the price the buyer pays and the price the seller receives real estate agent