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3) Suppose that the demand for a good is given by D(p) = 200 - p, where p is the price of the good. The
3) Suppose that the demand for a good is given by D(p) = 200 - p, where p is the price of the good. The supply curve for the good is S(p) = 3p. (a) Without a tax, what are the equilibrium quantity and price? (b) What are the equilibrium quantity and price if a $40 per unit tax is imposed on buyers? (c) How does consumer's surplus change when the tax is imposed? (d) What is the total loss to the society (deadweight loss) due to the tax?
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