How much tax revenue is collected
Problem: Suppose the market for grass seed can be expressed as
Demand: QD = 100 - 2 P
Supply: QS = p
a. If government imposes a $5 specific tax to be collected from sellers: what is the price consumers will pay?
b. How much tax revenue is collected?
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If government imposes a $5 specific tax to be collected from sellers: what is the price consumers will pay? How much tax revenue is collected?
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