Illustrate with the help of a diagram, lower the price elasticity of demand, lower will be the per unit tax burden borne by the producers. (a) In the Demand-Supply analysis, what is meant by a Marshallian cross? Illustrate

(b) The demand and supply functions of a good are given by QD = 110 − 5P; QS = 6P where P, QD and QS denote price, quantity demanded and quantity supplied, respectively. Find the inverse demand and supply functions and the market equilibrium price and quantity.

(a) Lowering Price Elasticity of Demand and Per Unit Tax Burden on Producers:

Price elasticity of demand measures the responsiveness of quantity demanded to a change in price. In the context of taxation, it's crucial to understand how the burden of a per-unit tax is shared between producers and consumers. The tax incidence depends on the elasticity of demand and supply.

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