PURPOSE
The purpose of the assignment is to assess learners understanding on the effects of an event to a commodity market equilibrium.
REQUIREMENT
Assuming fuel is one of the main input for many sectors. When a war breaks out in Country A, which is the main producer for fuel in the world, it causes fuel supply disruptions in the world. Discuss the market equilibrium for fuel and car after the war outbreak.
Following the war, the government of Country A would like to impose tax RMx on cars. Ilustrate and explain with graph for the car market due to the taxes (Assuming the elasticity demand for car is elastic). In your opinion, who will bear more of the taxes imposed-suppliers or consumers?