The graph shows the imposition of tax on the sellers of a product. Study the graph and answer the questions that follows
(a) Identify the;
(i) price per unit of the product before
(ii) quantity demanded and supplied before tax;
(iii)price per unit of the product after tax;
(iv) quantity demanded and supplied after tax.
(b) Determine the:
(i) amount of tax imposed per unit of the product
(ii) amount retained per unit by the sellers after tax.
(c) Calculate the percentage of the total tax imposed that is paid by;
(i) buyers per unit, (ii) sellers per unit
a(i)Price per unit of the product before
tax = $80
(ii) Quantity demanded and supplied be- fore tax = 60 units
(iii) Price per unit of the product after tax = $100
(iv) Quantity demanded and supplied after tax = 54 units
b(i) Amount of tax imposed per unit of the product = $100 - $75
(ii) Amount retained per unit by the sellers after tax
= Price per unit-amount of tax per unit = $100-$25 = $75
c(i) Percentage of the total tax imposed paid by the buyers per unit
\(\frac{\text{(Amount of tax paid by buyers)}}{\text{Total tax imposed}}\) x 100
Amount of tax paid by the buyers
= $100-$80 = $ 20
= \(\frac{$20}{$25}\) x 100 = 80%
c(ii) Percentage of the total tax imposed paid by the seller per unit
= \(\frac{\text{(Amount of tax paid by sellers)}}{\text{Total tax imposed}}\) x 100
= $80 - $75 = $5
= \(\frac{$5}{$25}\) x 100 = 20%
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