Assume a VAT situation where the tax rate is 15 percent, with export sales exempt. The manufacturer does not purchase inputs on which VAT has been paid, and its net selling price to the wholesaler before VAT is £250. The wholesaler adds value of £300, and the retailer adds value of £500 to the consumer.

a. What are the gross and net selling prices at the manufacturer, wholesaler, and retailer levels?

b. How much in VAT is paid to the tax authorities at each level?

c. What is the final amount that the domestic consumer pays, and how much of that is VAT?

d. Would your answer to (c) be the same if the retailer were to export the goods instead of selling them to a domestic consumer?