Tuesday, January 3, 2012

How do you calculate the excise tax? need help and the question is in the bottom ....?

6. Suppose that the price of overnight package delivery service is $18 before a $5 excise tax is imposed. With the tax, the price rises to $20. What is the supplier’s burden (incidence) of the tax? What is the consumer’s? Under what cirstances does the burden of an excise tax fall mainly on consumers?

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