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Answer :
Based on the price elasticity of demand and supply, and the imposition of an excise tax, buyers will bear 40 percent of the burden of the tax.
To determine the burden of an excise tax, we need to compare the price elasticities of demand and supply. The burden of the tax falls more heavily on the side of the market that is less elastic. In this case, the price elasticity of demand is 3.5, while the price elasticity of supply is 1.5.
Since the price elasticity of demand is greater than the price elasticity of supply, buyers are more responsive to changes in price compared to suppliers. Therefore, buyers will bear a larger proportion of the tax burden. The exact proportion can be calculated using the formula:
Buyers' share = (Price elasticity of supply / (Price elasticity of demand + Price elasticity of supply)) x 100
In this case, (1.5 / (3.5 + 1.5)) x 100 = 40 percent.
To know more about tax burden here: brainly.com/question/33690004
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