The supply and demand equations of a good are given by 3P Q S = 3
Question:
The supply and demand equations of a good are given by
3P − QS = 3
and
2P + QD = 14
respectively.
The government decides to impose a tax, t, per unit. Find the value of t which maximises the government’s total tax revenue on the assumption that equilibrium conditions prevail in the market.
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The new supply equation is 3P1Qs 3 3P3tQs 3 which can be rearrang...View the full answer
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