Question
Suppose the inverse demand equation for unleaded gasoline isP=22Q P=22Q, and the inverse supply equation isP=3Q P=3Q, where P is the per gallon price. The
Suppose the inverse demand equation for unleaded gasoline isP=22Q
P=22Q, and the inverse supply equation isP=3Q
P=3Q, where P is the per gallon price. The government decides to impose a $2 excise tax on gasoline, and gas stations file the tax. How much dollars does the consumer pay per gallon in equilibrium after the imposition of tax?
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Introduction to Econometrics
Authors: James H. Stock, Mark W. Watson
3rd edition
133595420, 978-0138009007, 138009007, 978-0133486872, 133486877, 978-0133595420
