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Scenario: the Market for Good X

Question 281

Essay

Scenario: The Market for Good X:
The market for good X can be depicted with the following demand and supply equations: Demand: P = 50 - 1/2Q
Supply: P = 1/3Q
where P is price per unit and Q represents quantity in units.Policy makers plan on imposing a
$1 per unit tax on this good.
(Scenario: The Market for Good X) Look at the scenario The Market for Good X.The per-unit tax incidence on producers is equal to:
A.$1.00.
B.$0.40.
C.$58.80.
D.$60.00.

Correct Answer:

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