Suppose the U.S. government imposes a $1 per gallon of milk tax on dairy farmers. Using the

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Suppose the U.S. government imposes a $1 per gallon of milk tax on dairy farmers. Using the demand and supply equations from question 1:
a. What is the effect of the tax on the supply equation? The demand equation?
b. What are the new equilibrium price and quantity?
c. How much do dairy farmers receive per gallon of milk after the tax? How much do demanders pay?
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Macroeconomics

ISBN: 978-0077307110

8th edition

Authors: David Colander

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