Form groups of four to five
Your instructor will assign you one of the following to complete as a group. After working on this as a group bring your rough draft to the board to share with the class. Work on the remaining three individually.
Develop a sketch for the following demand curves.
Perfectly inelastic
Highly inelastic
Perfectly elastic
Highly elastic
Identify and label the following:
consumer price and producer price after the tax and before the tax.
total tax revenue and per unit tax revenue
tax incidence for consumer and producer
DWL if it exists
Give examples of companies, products, industries, etc that represent these four types of elasticities.
Which elasticity of demand is best for the consumer and producer?