Suppose in an Effort to Raise Tax Revenue, British Columbia

Essay

Suppose in an effort to raise tax revenue, British Columbia decides to legalize the sale of marijuana.The province will charge a tax of $10 per gram on each sale, and the province claims that retailers will bear the entire burden of this tax.Draw a graph illustrating the situation where retail outlets would bear the entire tax burden of $10 per gram of marijuana.Explain what would need to be true about the demand for marijuana for retailers to bear the entire burden of this tax, and if this would likely occur if marijuana sales were actually legalized.