The PED and TR, tax incidence and subsidies
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6 Terms
1
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Tax incidence is the more elastic side of the market will pay a smaller share of a tax?
the manner in which the tax burden is divided between buyers and sellers.
2
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The more elastic side of the market will pay
a smaller share of a tax
3
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When supply is more elastic than demand,
buyers bear most of the tax burden.
4
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When demand is more elastic than supply,
producers bear most of the cost of the tax.
5
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A subsidy is
an amount of money given directly to firms by the government to encourage production and consumption.
6
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The economic incidence of a subsidy indicates
who is made better off by the subsidy.
Note 
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