The supply of luxury boats is perfectly elastic, the demand for luxury boats is unit elastic, and with no tax on luxury boats the price is $1 million and 240 luxury boats a week are bought.

Now luxury boats are taxed at 20 percent. What is the price that buyers pay?

How is the tax split between buyers and sellers? What is the government’s tax revenue? On a graph, show the excess burden of this tax. Is this tax efficient?