How much revenue will the government get

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Reference no: EM13182753

There are three firms in an economy: A, B, and C. Firm A buys $250 worth of goods from firm B and $200 worth of goods from firm C, and produces 200 units of output, which it sells at $5 per unit. Firm B buys $100 worth of goods from firm A and $150 worth of goods from firm C, and

produces 300 units of output, which it sells at $7 per unit. Firm C buys $50 worth of goods from firm A and nothing from firm B. It produces output worth $1,000. All other products are sold to consumers.

B. If a tax on total value added of each firm (value-added tax) of 10 percent is introduced, how much revenue will the government get?
c. How much would government get if it introduced a 10 percent income tax?
d. How much would government get if it introduced a 10 percent sales tax on final output?

Reference no: EM13182753

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