If the government collects a 5 per unit tax from sellers


Suppose the market for grass seed can be expressed as

Demand: Q = 200 - 5p

Supply: Q= 40 + 5p

If the government collects a $5 per unit tax from sellers,

a) how much will the quantity demanded change from the amount demanded before the tax?

b) what price will consumers pay after the tax?

c) what price will sellers receive after the tax?

d) what is the tax revenue?

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Business Economics: If the government collects a 5 per unit tax from sellers
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