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or a tennis shoe market. Suppose that this market is in a situation of perfect competition. The gold curve in this market is given by

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or a tennis shoe market. Suppose that this market is in a situation of perfect competition. The gold curve in this market is given by (:10 (p) = 2p, where 00 denotes the number of pairs of shoes and p the price of a pair of shoes. At market equilibrium without government intervention, we have 0 = 200 and p = 100. Furthermore, the price elasticity of demand at market equilibrium is equal {in absolute value) is equal to 3. Suppose the government comes to impose on consumers a unit tax t = 20 per pair of shoes purchased. Question : What then is the price paid by consumers for a pair of sneakers at market equilibrium

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