Determine the new equilibrium price

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Reference no: EM136533

Suppose demand and supply are given by

Qxd =7- 1/2Px and

Qxs =1/4Px-1/2

• Determine the equilibrium price and quantity

• Suppose a $6 excise tax is imposed on the good.

Determine the new equilibrium price and quantity

• How much tax revenue does the government earn with $6 tax.

Reference no: EM136533

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