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A Tax of R1.00 Per Litre on Petrol

Question 23

Multiple Choice

A tax of R1.00 per litre on petrol


A) places a tax wedge of R1.00 between the price the buyers pay and the price the sellers receive.
B) decreases the price the sellers receive by R1.00 per litre.
C) increases the price the buyers pay by R1.00 per litre.
D) increases the price the buyers pay by precisely R0.50 and reduces the price received by sellers by precisely R0.50.

Correct Answer:

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