Shade in the tax incidence for producers and consumers

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Reference no: EM131098481

The following equations are the market demand and supply schedules before the imposition of a per unit tax. (Qd = quantity demanded, Qs = quantity supplied, P = price)

Good X;Qs = P;Qd = 10

Good Y;Qs = P;Qd = 10 – P

Assume there is an imposition of a $2 per unit tax on producers. Graph the supply and demand curves before and after the tax, for each good. On each graph, shade in the tax incidence for producers and consumers.

Reference no: EM131098481

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