Suppose the government of Country X would like to reduce traffic congestion by imposing a per-unit tax on car sellers. With the aid of a well-labeled demand-and-supply diagram, explain the effects of the per-unit sales tax on the car market in Country X, and the tax incidence. а. b. Many car sellers complain about the heavy tax burden of the per-unit sales tax. To address the complains of the car sellers, the government of Country X proposes the tax to be levied on car buyers instead of car sellers. Under what condition will the sellers bear a larger tax burden than buyers? Explain whether the new proposal can successfully reduce the tax burden of car sellers.

Suppose the government of Country X would like to reduce traffic congestion by imposing a per-unit tax on car sellers. With the aid of a well-labeled demand-and-supply diagram, explain the effects of the per-unit sales tax on the car market in Country X, and the tax incidence. а. b. Many car sellers complain about the heavy tax burden of the per-unit sales tax. To address the complains of the car sellers, the government of Country X proposes the tax to be levied on car buyers instead of car sellers. Under what condition will the sellers bear a larger tax burden than buyers? Explain whether the new proposal can successfully reduce the tax burden of car sellers.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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