Answer to Question #281504 in Microeconomics for Semon

Question

If the supply curve is perfectly elastic and demand is linear and downward sloping. what is tne ettect of a sl specific tax collected from producers on equilibrium price and quantity?

Answer 1

If the supply curve is perfectly elastic and demand is linear and downward sloping, then the specific tax collected from producers will not affect equilibrium price and will decrease equilibrium quantity.