The question of who pays the greater amount of a commodity tax is determined by:
1 answer:
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The new ordinance will make a difference when the new wages will be binding.
<h3>How to depict the information?</h3>It should be noted that the supply curve shows the relationship between the price and the quantity supplied.
Based on the information given, when the equilibrium wage is above the minimum wage, the ordinance won't make a difference.
On the other hand, when the equilibrium wage is below the minimum wage, it'll make a difference for the worker.
Therefore, joining the lowest of the two points will give the equilibrium.
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