Essay
Suppose that instead of a supply-demand diagram,you are given the following information:
QS = 100 + 3P
QD = 400 - 2P
From this information compute equilibrium price and quantity.Now suppose that a tax is placed on buyers so that
QD = 400 - (2P + T).If T = 15,solve for the new equilibrium price and quantity.(Note: P is the price received by sellers and P + T is the price paid by buyers.) Compare these answers for equilibrium price and quantity with your first answers.What does this show you
Correct Answer:
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Prior to the tax,the equilibrium price w...View Answer
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Correct Answer:
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