What are the new equilibrium quantity-what is tax revenue

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The supply and demand curves are: Qs = -800 + 15p and Qd = 3200 - 25p

(a) Solve for the market equilibrium.

(b) Now suppose a tax of $20 per unit is imposed on consumers. What are the new equilibrium quantity, buyer's price and seller's price? What is tax revenue? Graph your answer.

(d) Explain how the price changes for buyers and sellers relate to the supply and demand elasticities.

Reference no: EM13818393

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