Suppose that before tax was imposed 400 million gallons of gasoline was supplied at $3.00 per gallon. ⦁    What happens when government imposes a tax of 60 cents per gallon on sellers?  ⦁    How would such a tax affect the market for gasoline i.e. what is the new equilibrium?  ⦁    On whom does the incidence of the tax fall more heavily?

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