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Question 3. Suppose that the demand curve for a particular commodity is QD=abP , where QD is the quantity demanded. P is the price, and
Question 3. Suppose that the demand curve for a particular commodity is QD=abP , where QD is the quantity demanded. P is the price, and a and b are constant parameters. The supply curve for the commodity is Q5=c+dp where Q5 is the quantity supplied. and C and d are constant parameters. A) Find the equilibrium price and output as functions of constant parameters a, b, C and d B) Suppose now that a unit tax of 11 dollars is imposed on the commodity. Show that the new equilibrium is the same regardless of whether the tax is imposed on producers or buyers of the commodity
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