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perfect competition macroeconomic perspective other considerations of tax burden tax burden of a country relative to gdp consumer and producer surplus effects on the budget constraint other practical results assessment see also notes tax incidence in competitive markets[ edit ] in competitive markets

is inelastic, they will produce the same quantity no matter the price. because the consumer is elastic, the consumer is very sensitive to price. a small increase in price leads to a large drop in the quantity demanded. the imposition of the tax causes the market price to increase from p without tax...

https://en.wikipedia.org/wiki/Tax_incidence

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