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Supply and Demand Assignment | Homework For You

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December 9th, 2019

Suppose that the Pacific island economies as a whole decide to reduce air pollution in the midst of climate change by reducing its use of petrol fuel. They impose a $0.50 tax on each liter of petrol sold.

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Homework For You

a. Should they impose this tax on producers or consumers? Explain carefully using a supply and demand diagram.

b. If the demand for petrol fuel were more elastic, would this tax be more effective or lesseffective in reducing the quantity of petrol fuel purchased? Explain with both words and adiagram. Get Economics homework help today

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