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Consider a market supply and demand represented by the following: Q s = 4P - 120 and Q d = 1000 - 10P. Use this
Consider a market supply and demand represented by the following: Qs= 4P - 120 and Qd= 1000 - 10P. Use this information to answer the following questions.
- Calculate equilibrium price and quantity.
- What is the consumer surplus?
- If the government imposes an excise tax of $2, what would be the new equilibrium price, quantity?
- What would happen to the consumer surplus?
What is the answer to number 3? Also how to you get to that answer?
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