Quiz 1. Taxes - P d ) and the producers receive ( P s ) and...

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ECON 201 Shomu Banerjee TAX QUIZ The market for a product has the following inverse demand and supply functions P d = 120 - Q d P s = 0.5 Q s . (a) Find the equilibrium price P* and quantity Q* . (b) Suppose the state government levies a tax of $15 on each unit sold, imposed on the sellers. (i) Find the prices that consumers pay (
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Unformatted text preview: P d ) and the producers receive ( P s ) and the new quantity traded in the market, Q **. (ii) How much money does the state government collect as tax revenue? (iii) Calculate much of the tax burden falls on the producers and how much on the consumers....
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