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Tax Incidence

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With the article from Boston.com - try to answer the questions that follow: http://www.boston.com/business/articles/2008/05/11/gas_stations_offering_credit_cash_discounts_could_lose_customers/

1. Is the tax levied on the producers or consumers?
2. How does the tax affect supply or demand?
3. How does the tax affect equilibrium price and quantity?
4. In this market, describe a hypothetical situation where a price ceiling or floor could be imposed. What implications would this have for the market?

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1. The sales tax levied on ready-made take-out food is levied on consumers.
2. Taxation causes equilibrium at a point where producers want to make more than consumers to want to purchase. This is because the government levies an additional cost, ...

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