The supply of luxury boats is perfectly elastic. The demand for luxury boats is unit elastic , and with no tax on luxury boats, the price is $1 million and 320 luxury boats a week are bought. Now luxury boats are taxed at 40 percent.
Question one: After the tax is imposed, the buyer pays ____ for a luxury boat. Answer to Question One: $1.40 million
Question two: Choose the statement about the tax incident that is correct. Answer to Question two: The buyer pays all the tax.
Question three: (I need the answer to this one) The government raises tax revenue of $____ million (answer to 1 decimal place)