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Suppose that the government collects a specific tax of t = N$1.5 per kg of processed beef from beef producers. The equilibrium price and quantities

Suppose that the government collects a specific tax of t = N$1.5 per kg of processed beef from beef producers. The equilibrium price and quantities were 3.50 and 225 respectively. After the imposition of tax, price paid by consumes increase to P = 4.5, quantities decrease to 220, the price received by the sellers dis decrease to P =N$3. (a) What is tax revenue from consumer? (2) (b) What is tax revenue from producers? (2) (c) What is the tax incidence that falls on consumer? (2) (d) What is the tax incidence that falls on the producer? (2) (e) Do you care whether a N$1.5 tax per kg of processed beef is collected from beef producers or from consumers at store? Why? (4) (f) Verify that t s t b 1 , where ts is the seller's share of the tax, and tb is the buyer's share of the tax.

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