Essay
A market is described by the equations Qd = 100 - P, and Qs = P. A tax of $10 is placed on the buyer of the product such that the new demand equation becomes Qd = 100 - (P + T), where T is the tax is dollars. Does the buyer pay the whole $10 of the tax burden? How much does the buyer pay? How much does the seller pay? Why do they split the burden in this way?
Correct Answer:
Verified
Correct Answer:
Verified
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