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1. 1. Suppose the demand for movies is represented by Qd = 15- 4P, and the...

1. 1. Suppose the demand for movies is represented by Qd = 15- 4P, and the supply of movies is represented by Qs = 4P – 1. Calculate the equilibrium quantity and price of movies if P is in dollars and Q is in hundreds of movie tickets sold. If the local government imposes an entertainment tax of $0.50 on each movie, what is the new equilibrium price and quantity? Does it matter whether the tax is imposed on the movie theatre or on the consumer? Show your work on all questions.
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