The government used to levy a wholesale tax of $1.5 per litre on petrol, but it will be cancelled tomorrow morning. a Will the petrol price drop by $1.5 tomorrow? Explain why or why not. (9 marks) b Who would benefit from the policy consumers, producers or the government? Draw a diagram to show the change in surplus before and after the tax is cancelled. (9 marks) c If, instead of cancelling the tax, the government decided to force the price to drop by $1.5 by imposing a price ceiling, would producer profits rise or fall compared to the case of cancelling the tax in part (a)