Условие:
Consider a perfectly competitive industry with horizontal supply curve. At current equilibrium consumers pay a per unit sales tax with rate t=$2 and current consumers’ price is $40. It is known that price elasticity of demand at current price is -4. Will a (differentially) small increase in the tax rate generate some extra tax revenue?\nProduce an algebraic solution and illustrate the change in tax revenue graphically (at your graph consider a small finite increase in the tax rate).

