Question: Suppose demand and supply are given by a. Determine the equilibrium price and quantity. Show the equilibrium graphically.b. Suppose a $6 excise tax is imposed

Suppose demand and supply are given by

a. Determine the equilibrium price and quantity. Show the equilibrium graphically.b. Suppose a $6 excise tax is imposed on the good. Determine the new equilibrium price and quantity.c. How much tax revenue does the government earn with the $6tax?

1. Q =7- -P, and Q =-P.- 2

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a b A 6 excise tax shifts the supply curve up by the amount of the tax Mathematically this mean... View full answer

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