2019 May (Indirect Tax) Paper 3 HL
Supply is Perfectly Inelastic therefore Producers pay all of the tax and for an explanation that equilibrium price and quantity will not change (so consumers are not affected but producers bear the full burden/incidence)
*Imagine there is only 1 picture painted by an artist, and then the artist dies. The supply of that good is perfectly inelastic, there is only one and there will never be another one created. Look at where the demand curve crosses the perfectly inelastic supply curve and recognize at the price of 30 (100 but lets say 1) painting would be purchased. No one will buy if the price is 35, so the seller of the painting will pay the tax to keep the price at $30.
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