Elastic Demand and Tax burden?

CFA Level I
#1

If the demand is elastic, who bears most of the tax burden?

#2

Tax burden is carried by whoever has the greater inelasticity.

#3

good point… and its true. But Schweser video says the other way arround and that is mistake.

#4

Have you come across a question which ask us to calculate the amount of consumer or producer surplus?

#5

Absolutely never! And that is 4100 q bank questions and 4 sample exams later… but i have had the concept tested.

#6

is it half of QTY* (diffirence in price)?

#7

I have come across a question on calcuating consumer and product suprlus… It is the formula for calcuating the area of a traingle = (base x height) / 2

#8

Thanks BCH