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Unformatted text preview: Q : 120  Q** = 0.5 Q** + 15 Q** = 70. Substitute in each equation to get P D = $50 and P S = $35. (ii) How much money does the state government collect as tax revenue? Q** x t = 70 x $15 = $1050. (iii) Calculate much of the tax burden falls on the producers and how much on the consumers. The perunit burden on consumers is $50$40 = $10. The perunit burden on producers is $40$35 = $5. Multiply each number by Q** to get the total burden: $700 and $350....
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 Summer '07
 Dr.ShomuBanerjee
 Microeconomics

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