I’m trying to keep to a schedule here, people…and I guess I’m sort of succeeding. Anyway, here’s the next installment in your tax series- this time I put a tax on consumers and see what happens. I promise that it’s only a little disappointing to me that after all that work I get the same answer as I did when I put the tax on producers. :-/
The first video gives the intuition regarding how to shift curves in the supply and demand diagram as a result of the tax and provides a graphical solution to the tax problem:
The second video goes through the algebra of shifting the demand curve:
The third video shows how to solve for equilibrium algebraically and matches all of the relevant quantities to the graphical solution.