3. Starting with QD = 450 – 2.5P and QS = 90 + 5P and supposing...

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3. Starting with QD = 450 – 2.5P and QS = 90 + 5P and supposing...

3. Starting with QD = 450 – 2.5P and QS = 90 + 5P and supposing that the government imposes an excise tax of $3 per unit collected from producers, find (a) the new equilibrium price and quantity and (b) how much of the tax is actually paid by consumers and how much falls on producers

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Answer 1

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Step by step solution is provided in the pic attached here.

Ds art 320 → @p-= yy2-S--2-of 47

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3. Starting with QD = 450 – 2.5P and QS = 90 + 5P and supposing...

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