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The market for e-cigarettes is given as: Demand: P = 74 - 3Q Supply: P = 4Q Due to the negative health effects of e-cigarettes,
The market for e-cigarettes is given as: Demand: P = 74 - 3Q Supply: P = 4Q Due to the negative health effects of e-cigarettes, the government has imposed a $10 per unit tax on the product. However, consumers are unhappy with this policy and have lobbied the government to abolish the tax and impose a price ceiling instead. The government yields to the political pressure and replaces the tax with a price ceiling that ensures the quantity of e-cigarettes transacted in the market under this intervention is the same as the quantity transacted under the tax. By how much does consumer surplus increase
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