22 Sep Demand, supply and taxes
Taxation isn’t always the most appealing subject, particularly for those paying it. But as a key element of micro-economics, it is something that upper years students studying the subject have to understand inside out. Dr Garg’s economics class relocated to the Quad for a lesson, with the tiled floor transformed into a blackboard on which to map out the impact of taxes on the market.
Students learnt that rather than the entire burden of taxes on goods being borne by the seller, the relative elasticities of demand and supply determine who bears what proportion of the tax. Learning also included the concepts of consumer surplus – the difference between what a consumer is willing to pay for a good and what they actually pay – and producer surplus – the gap between what a producer receives for a good, and what they are willing to sell it for – and how taxation can have an impact on both of these through dead weight loss.