Question
Consider a market of a good where the demand is given by D : P, + and the supply S : R + such
Consider a market of a good where the demand is given by D : P, + and the supply S : R + such that, given price p 2 0, D(p) represents the quantity demanded and S(p) the quantity supplied. Suppose the sellers of the good pays a proporitonal tax at a flat rate 0 e (0, 1). Hence, given price p* , the quantity demand Qd and the quantity supplied QS is given by Suppose that, p* is a market equilibrium price such that Q equations of interest is Suppose D and S are differentiable with derivatives TY derivatives dQ*/d0 and dp* ,/d0. Q*. So the system of 0 and S' > 0. Evaluate the
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