=+c. Now suppose that a per-unit tax t (payable in terms of x2 ) is introduced. Let
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=+c. Now suppose that a per-unit tax t (payable in terms of x2
) is introduced. Let p be the price buyers will end up paying, and let 1p 2 t2 be the price sellers receive. Derive the equilibrium levels of p and 1p 2 t2 as a function of t. (Hint: You will need to solve a quadratic equation using the quadratic formula, and the larger of the two solutions given by the formula is the correct one.)
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Related Book For
Microeconomics An Intuitive Approach With Calculus
ISBN: 9781337335652,9781337027632
2nd Edition
Authors: Thomas Nechyba
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