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Suppose the Market for Grass Seed Can Be Expressed As

Question 211

Essay

Suppose the market for grass seed can be expressed as:
Demand: QD = 100 - 2p
Supply: QS = 3p
If government imposes a 10% ad valorem tax to be collected from sellers,what is the price consumers will pay? How much tax revenue is collected?

Correct Answer:

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First rearrange the supply curve,p = Q/3...

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