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Suppose that the market for lumber is initially in equilibrium. Then government imposes a tax on lumber. What would we expect to happen? a. The
Suppose that the market for lumber is initially in equilibrium. Then government imposes a tax on lumber. What would we expect to happen?
a. The quantity of lumber traded after the tax will exceed the optimum quantity
.b. The welfare of participants in the lumber market will increase.
c. The quantity of lumber traded after the tax will be less than the optimum quantity.
d. The welfare of sellers in the lumber market will increase, and the welfare of buyers in the lumber market will decrease
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