A consumer values a car at $30,000 and a producer values the same car at $20,000. If the transaction is completed at $24,000, what level of sales tax will result in unconsummated transaction

Question

Business

Josiah Matthews

29 January, 11:51

A consumer values a car at $30,000 and a producer values the same car at $20,000. If the transaction is completed at $24,000, what level of sales tax will result in unconsummated transaction

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Answers (1)

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Kristopher Morales · Answer 1

Dear user,

Answer to your query is provided below

$4000 sales tax

Explanation:

In question, a consumer values a car at $30,000 and a producer values the same car at $20,000. If the transaction is completed at $24,000, then the transaction will generate:

$6,000 worth of buyer surplus and $4,000 of seller surplus.

$4000 sales tax will result in unconsummated transaction.