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4-) (30 Points) The market demand for rose is QD = 2400-60P and the market supply for rose is Qs=-600 +40P. Government imposes a $5
4-) (30 Points) The market demand for rose is QD = 2400-60P and the market supply for rose is Qs=-600 +40P. Government imposes a $5 tax per unit of rose sold by the producer. I a) Who bears the economic incidence of this tax? b) Why does one side take more burden of tax than the other side? c) Calculate the deadweight loss of a $5 tax per unit levied on producers of roses. d) How does your answers to parts (a) and (c) change if the tax was levied on consumers of rose
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