### Computing tax incidences for seller and buyer

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##### Reference no: EM1310605

Q1) Demand relationship for good is P = 25 - 3Q. Supply relationship for good is P = 5 + Q. Who bears economic incidence of tax if there is a \$1 per unit tax on buyer of this good? Who bears statutory incidence? Compute deadweight loss from this \$1 per unit tax and how much tax revenue government will get from tax. In determining tax incidence burden, compute tax incidences for both seller and buyer and sketch graph.

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