Question
Suppose the aggregate supply and demand for a good are given by the following expressions, wherep represents the price (in dollars): Q^s (p)=2p2&Q^d(p)=16p While there
Suppose the aggregate supply and demand for a good are given by the following expressions, wherep
represents the price (in dollars):
Q^s (p)=2p2&Q^d(p)=16p
While there is currently no tax imposed on the production or consumption of this good, suppose the government is considering levying a tax of
dollarson each unit of the good produced. However, the government is concerned about increasing the price that consumers must pay for the good by too much. If the government wants to ensure that the price consumers pay doesn't increase by more than four dollars, what is the largest tax that they can charge?
Largest tax is= ?dollars
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