Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Q2: Suppose the demand function is
p = 50 - 2q………………1
and the supply function is
p = 10 + 3q…………….2
c) Suppose the government imposes a per unit tax of $5 on producers, what would be the effect of this tax on market clearing price and quantity? ( show your answers)
d) Find the consumer and producer tax burden.
e) Calculate the tax revenue that the government received.
Only solve d and e
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