I am stuck with this question. im hoping someone can lead me to an answer
The Federal Government is considering increasing the sales tax on petrol by $.03 per litre. Last year motorists purchased 10 million litres of petrol per month. The demand curve is such that every $.01 increase in price decreases sales by 100,000 litres per month. You also know that for every $.01 increase in price, producers are willing to provide 50,000 more gallons of gasoline to the market. The Government has stated that the $.03 tax will increase government revenues by $300,000 per month and raise the price of gasoline by $.03 per litre. Is this correct?