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Suppose the supply of housing construction is infinitely elastic at a price of $150 per square foot Currently 1 million sqare feet are built per month If the price elasticity of demand for housing

Suppose the supply of housing construction is infinitely elastic at a price of $150 per square foot. Currently 1 million sqare feet are built per month. If the price elasticity of demand for housing is 1, calculate the monthly excess burden of a 10 percent tax on housing construction. What is the monthly excess burden if the tax is 20 percent? Who will bear the incidence of the tax?

 

Apr 19 2020 View more View Less

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