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b. Suppose a $12 excise tax is imposed on the good. Determine the new equilibrium price and quantity.Equilibrium price: $ Equilibrium quantity: c. How much tax revenue does the government earn with the $12 tax

Respuesta :

It can be deduced that the equilibrium price and equilibrium quantity will be $9 and 55 respectively.

What is equilibrium?

Your information is incomplete. Therefore, an overview will be given.

For example, if the quantity demanded is 100 - 5P and the quantity supplied is -125 + 20P. The equilibrium quantity will be:

100 - 5P = -125 + 20P

20P + 5P = 100 + 125.

25P = 225.

P = 9

The price is $9.

Therefore, the equilibrium quantity will be:

Q = 100 - 5P

Q = 100 - 5(9)

Q = 100 - 45

Q = 55

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