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Figure 5 Refer to Figure 5 . a . If there is no government intervention, what is the equilibrium price and quantity of the good?
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Refer to Figure
a If there is no government intervention, what is the equilibrium price and quantity of the good?
b Calculate the Consumer Surplus CS Producer Surplus PS and Total Surplus TS in this market, if there is no government intervention. Be sure to clearly label and state the value for each. For partial credit, provide your equations.
Suppose the government places a $ tax per unit on this good, collected from the producer.
c How many units of this good will be bought and sold after the tax is imposed?
d Calculate the Consumer Surplus CS Producer Surplus PS Government Tax Revenues, and Total Surplus TS in this market, if the $ tax is imposed. Be sure to clearly label and state the value for each. For partial credit, provide your equations.
e Is there any Deadweight Loss? If so calculate it and describe why it exists.
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