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In a Particular Market, Market Demand Is Given by the Equation

Question 209

Essay

In a particular market, market demand is given by the equation
QD = 60 - P
and market supply is given by the equation
QS = P
Suppose a per-unit tax is imposed that reduces the number of units bought and sold in the market to 25 units. What is the size of the tax, and who bears the greater burden of the tax, buyers or sellers?

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If the number of transactions falls to 2...

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