Explain how much tax revenue does this tax create

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Reference no: EM1363825

Consider again the supply and demand system in #1. Suppose an excise (per unit) tax
in the amount of $2.00 is imposed.

A. What is the equilibrium price and quantity (PAT, QAT)?

B. What is the price received by producers net of the tax (PN)?

C. Explain how much tax revenue does this tax create?

D. Illustrate what proportion of the tax is borne by consumers?

E. What proportion of the tax is borne by producers?

Reference no: EM1363825

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