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4. [2 points] Suppose deposits of copper are in fixed supply, QS = 100 tons. The demand for copper (in tons) is QD = 150
4. [2 points] Suppose deposits of copper are in fixed supply, QS = 100 tons. The demand for copper (in tons) is QD = 150 5p. (a) What is the price paid by consumers and received by producers in absence of any tax? Show your work. (b) Now suppose the government levies a tax of $5 per ton. What is the price paid by consumers? Received by producers? Clearly explain your answer. (c) What is the revenue raised by the tax? Who pays for it? Show your work. (d) What is the deadweight loss of the tax? Clearly explain your answer.
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