Question

The demand for rutabagas is still Q = 2,000 – 100P and the supply is still Q = –100 + 200P, as in Question 2. Governor Sloop decides that instead of imposing the $2 sales tax described in Question 2, the government will instead force stores to pay the tax directly. What will happen to the “sticker price” on rutabagas? How will the size of the consumer tax burden change?


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  • CreatedApril 25, 2015
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