Read the sections on Demand, Supply, Market Equilibrium, and Government Intervention and Disequilibrium for a mathematical exposition of the demand and supply model, clicking through to the next when you have finished each page. The chapter also covers price ceilings and price floor analysis as well as quantity regulations.
Taxation Impact on Economic Output
Elastic supply, inelastic demand
Consumption is inelastic, so
the consumer will consume the same quantity no matter the price. The
producer will be able to produce the same amount of the good, but will
be able to increase the price by the amount of the tax. As a result, the
of the tax will be borne by the consumer.