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ECON1 - 0417 - -it doesn’t matter whether the tax is on...

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Econ 1 – Sales Tax 4/17/2009 Many examples: Gasoline Tax Cigarette tax Motel occupancy tax What do we want to know? - How does tax affect price, quantity, and profits - If we tax seller, do they just pass along tax to buyers in form of higher prices? Bottom Line
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Unformatted text preview: -it doesn’t matter whether the tax is on the buyer or seller-The net price to the buyer is the same-The net price to the seller is the same (net price: taken tax into consideration)-What we discovered in our experiment is a general result...
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