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hello in this video were going to use supply and demand to determine which side of the market benefits the most from a tax cut so here is our supply and demand where the equilibrium price before the tax is ten dollars and the equilibrium quantity is ten so were going to consider the following market that has a nine dollar per unit tax if the tax is reduced to three dollars per unit a six dollar tax cut which side of the market benefits the most from a tax cut so lets start with the nine dollar per unit tax so before the tax cut the tax in the market is nine dollars per unit which is just the length of this red arrow here thirteen minus four is nine dollars that is the amount of the tax so buyers are paying thirteen dollars when theres a tax in the market the buyers tax burden is 13 minus 10 10 being the price without the tax so buyers are paying three dollars of this tax in the form of higher prices so overall buyers pay one-third of the tax in the form of higher prices three div