Suppose that a local government levies an excise tax on hotdog sellers. Before the tax, 3...

Suppose that a local government levies an excise tax on hotdog sellers. Before the tax, 3 million hotdogs were sold at a price of $0.75 per hotdog. With the tax in effect, 2.5 million hotdogs are sold, consumers pay $0.95 per hotdog, and sellers receive $0.65 per hotdog.

In the scenario above, what is the amount of the tax per hotdog?

$

(Enter a number with two digits after the decimal point, e.g., 0.40.)

In the scenario above, what percentage of the tax is paid by buyers?

% (Round your answer to a whole number, e.g., 25.)

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

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