Legalization of marijuana can raise additional revenues by taxing marijuana to government In particular, the state...

Legalization of marijuana can raise additional revenues by taxing marijuana to government In particular, the state you are working for is considering a $5 tax on every 100 grams of marijuana but is unsure whether they should tax the buyers of marijuana or the suppliers. Advise the government on the type of tax they should impose; that is, should they tax the buyers or the sellers and what effect would it have on the market? It might be useful to note that there is some evidence to suggest that the demand for marijuana is inelastic while the supply of marijuana is elastic, though neither demand or supply is perfectly inelastic or perfectly elastic. WITH DIAGRAM

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Rahul Sunny answered 11 months ago

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