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Suppose the market for cau-hot-dogs is characterized by the following daily demand and supply curves. Drawing...

Suppose the market for cau-hot-dogs is characterized by the following daily demand and supply curves.

Drawing a diagram of the curves will help you find the right answers.

Demand curve: P = 1300 - Q

Supply curve: P = 180 + 9Q

Suppose the government requires the seller to pay 10% of the final price of a cau-hot-dog as an ad valorem tax.

5. How much is the price paid by the buyers for a cau-hot-dog in this case?

6. How much will the seller receive for each sale of a cau-hot-dog in this case?

7. Whose tax burden is greater in this case?

8. How much is the total tax revenue for the government in this case?

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