Suppose in problem that a sales tax of $2 per pound is imposed on catnip. What is the new market price of catnip? What price do demanders actually pay? What is the new equilibrium quantity? b. Suppose instead that an excise tax of $2 per pound is imposed on catnip. What is the new market price of catnip? What price do suppliers actually collect? What is the new equilibrium quantity? c. As a consumer of catnip, would you prefer to live in a world with a sales tax or with an excise tax? How about if you were a supplier of catnip?
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