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Suppose the Market for Grass Seed Can Be Expressed as

question 94

Essay

Suppose the market for grass seed can be expressed as
Demand: QD = 100 - 2p
Supply: QS = 3p
If government imposes a $5 specific tax to be collected from sellers,what is the price consumers will pay? How much tax revenue is collected? What fraction is paid by sellers?

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Definitions:

FOB Seattle

A shipping term indicating that the seller's responsibility ends when the goods are placed on board a ship at the Seattle port; the buyer is responsible for freight and risks from that point.

Risk Of Loss

Refers to the legal responsibility regarding who bears the financial burden if goods are damaged or lost during a transaction.

Risk Of Loss

The potential for an asset to decrease in value or become entirely worthless.

Shipping Terms

Conditions agreed upon by the buyer and seller regarding the delivery of goods, including the mode of transport, payment, and point of delivery.

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