Essay
Suppose that a market has the following supply and demand equations:
Demand: QD = 380 - 10p
Supply: QS = 80 + 5p
If the government imposes a specific tax of τ on suppliers,what will be the price buyers pay and sellers receive,quantity,and government revenue from the tax (as functions of τ).What tax level maximizes the revenue the government collects from the tax?
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First,compute the after-tax equilibrium ...View Answer
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