"The price of gas is $2.00 a gallon before any taxes. Suppose the government imposes a $1.00 per gallon sales tax on gas."
Rachel and Jacob believe that the change in price has an effect on different things than the other. The first part of the question is how the equillibrium changes.
I don't understand the second part of the question though, wouldn't the consumer always be the one paying the tax because it is a sales tax?
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