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Questions › IIT JAM › IIT JAM 2024 › Q28
2 marks, −0.667Public Economics › Taxation: incidence and efficiency › Tax incidenceModerateabout 2 min

IIT JAM 2024 Question 28: Taxation: incidence and efficiency

Suppose the price elasticity of demand (eDe_DeD​) is −15-\tfrac{1}{5}−51​ and the price elasticity of supply (eSe_SeS​) is 25\tfrac{2}{5}52​. Then, the incidence of a specific (or unit) tax on the firms is equal to

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Suppose the price elasticity of demand (e_D) is -1/5 and the price elasticity of supply (e_S) is 2/5. Then, the incidence of a specific (or unit) tax on the firms is equal to (A) 1/3 (B) 2/3 (C) 1/2 (D) 1/4

Taxation: incidence and efficiency has come up 79 times in 7 exams since 2009.

What this question tests

This question is on Tax incidence, part of Taxation: incidence and efficiency in Public Economics.

Who actually bears a tax, whoever the law makes pay.

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