Alright, so now let's talk about these special cases: perfectly elastic and perfectly inelastic. Right, so first we have a perfectly elastic demand, right? It's laying down entirely. It's super elastic. It's laying down. It's so comfy, right? And we've got our supply curve just kind of a standard supply curve, right? So what happens if, let's say, there's a tax here, right? Let's put the tax on suppliers and shift the supply curve to the left. And let's think about what happens here. So this is S2, this was S1, right? So now when demand is perfectly elastic, they're willing to buy any quantity, right, but they're only willing to buy it at a specific price. They're not going to pay more for this than this price that we see here. So what's going to happen to this tax burden? If the supplier tries to shift any of the burden to the consumers, they're not going to have it; they're not going to buy anymore, right? At a different price, they wouldn't purchase any. So in this case, the supplier is going to have to bear the entire burden of the tax. The seller bears the entire burden of the tax. So the price to the buyers is going to stay the same, and the price to the seller is going to decrease by the full amount of the tax.

So let's talk about the other situation. What about when we have perfectly inelastic demand and just a regular supply curve there? So now we're talking about that situation where it's like a life-saving drug or something that we need to have, no matter what the price, right? So now in this case, let's say there was a tax on the supplier, right? Just to keep it simple. Now what's going to happen is that since it's perfectly inelastic, the buyers are willing to pay any price, and they are going to take the full burden of the tax themselves, right? So in this case, the buyer takes the full burden, and this makes sense back to our previous conclusion where the more inelastic curve pays more tax. In the first case, who was more inelastic? Well, demand was perfectly elastic. You couldn't get any more elastic. So anything is going to be more inelastic than that, right? So the supply curve was more inelastic, and they paid more of the tax. In this case, it's the extreme example that they paid all of it. How about the other side? Here we have perfectly inelastic demand, right? You can't get any more inelastic than perfectly inelastic, and in that case, they're more inelastic than the other one, right? And so that's what we're seeing here. Since the demand is more inelastic and, in this case, perfectly inelastic, they're going to have more of the tax burden, and in this case, all of the tax burden. Alright, so our conclusion stays the same even at these extremes; it's just that the entire burden is being put on 1 person. Alright, so that's about it for these special cases, let's go ahead to the next video.