Explain what is the excess burden of the tax

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Suppose demand for widgets is given by the equation P = 20 - 0.5Q. Originally, the price of the good is $10 per unit. When a tax of $2 per unit is imposed, the price of the good rises to $12 per unit. Refer to Scenario 19.3. What is the excess burden of the tax?

Reference no: EM13220789

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