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Consider a market for beer in which foreign and domestic suppliers compete. Assume foreign and domestic beer are perfectly substitutable from the consumers perspective and
Consider a market for beer in which foreign and domestic suppliers compete. Assume foreign and domestic beer are perfectly substitutable from the consumers perspective and thus cost the same. Imagine that domestic producers lobby the government, which in turn imposes a tax on foreign beer. What would you expect to happen? Who would bear the burden of the tax?
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