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Unformatted text preview: equilibrium, which is what we are looking for. You do not need to take the total derivative of the entire equation D = S as in the previous case. For part b), the book is your friend. Read the sections on taxes, looking especially closely at Equation (2.27). The heavy lifting was done in part a), now you just need to use those values to calculate the incidence of the tax on consumers and ﬁrms, respectively. Good luck!! 1...
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This note was uploaded on 12/10/2011 for the course ECON 401 taught by Professor Burbidge,john during the Winter '08 term at Waterloo.
- Winter '08