Economics Homework Help

Task:

Utilise a tax within a demand and supply model for luxury cars, to analyse the Luxury 

Car Tax described on this webpage. Although in reality it is a percentage-based tax 

with even other complexities such as a threshold, as a simplification you can consider 

it as a basic per-unit tax of a fixed amount (and do not need to follow the correct 

numbers), to make it more similar to examples studies in our course.

The article says that the “tax is paid by dealers”. Explain why then it is not just the 

dealers (sellers) who are impacted by the tax. Detail the impacts caused by this tax on 

not just the dealers, but also on consumers, the government, and overall economic 

efficiency.

Ensure that you use diagrams where relevant to support your answer, and make sure 

to use key terminology and course concepts where appropriate.