Question

In: Economics

Suppose a state government imposes a tax on sales of hamburgers. Before the tax, 16 million...

Suppose a state government imposes a tax on sales of hamburgers. Before the tax, 16 million hamburgers were sold at $3.25 per hamburger. With the tax in effect, 14 million hamburgers are sold, buyers pay $3.75 per hamburger, and sellers receive $3.00 per hamburger.

In the scenario above, what is the tax ($ per hamburger)?

Solutions

Expert Solution

Answer:

Tax= Price paid by buyers- Price received by sellers

= $3.75 - $3.00

= $0.75

Thus tax is $0.75 per hamburger

Rahul Sunny answered 2 years ago
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