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Unformatted text preview: Q D = 1 P . What price will maximize revenue? 3. Suppose the supply and demand curves for gasoline are given by Q D = 91 4 P Q S = 2 P (a) What is the equilibrium price and quantity? (b) What is the price elasticity of demand and supply at the equilibrium? (c) Suppose the government impose a $0.9/gallon tax on gasoline, paid by buyers. Solve for the new equilibrium. What portion of the tax is is paid by consumers, and what portion by sellers? 1...
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 Fall '09
 Elmes
 Microeconomics, Price Elasticity

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