In an economy with unit elasticity of demand, the equilibrium price of Good A is $6 and equilibrium quantity demanded is 640 units. Suppose there is imposition of a tax of $2 on Good A. If the tax is collected from the suppliers, the equilibrium quantity demanded will be
  
enter your response here units.
If the tax is collected from the consumers, then the equilibrium price is $
  
enter your response here and the tax incidence
â–¼
falls on producers.
falls on consumers.
remains independent.
Part 2
Carly, Marquis, and Kodjo are discussing tax equity. Carly earns $75,000 per year, Marquis earns $50,000 per year, and Kodjo earns $100,000 per year. If they agree that the best option is a regressive tax, then which of the following is true?
A.
Carly should pay $15,000, Marquis should pay $8,000, and Kodjo should pay $22,000.
B.
Carly should pay $15,000, Marquis should pay $12,500, and Kodjo should pay $18,000.
C.
Carly should pay $18,750, Marquis should pay $10,000, and Kodjo should pay $28,000.
D.
Carly should pay $15,000, Marquis should pay $10,000, and Kodjo should pay $20,000.