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Results tagged with welfare
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user 42691
2
votes
How do I correctly incorporate a $3 tax on supply to each unit sold?
You first solve for $P$ in the supply curve.
$Q = 3P + 50 \iff 3P = Q - 50$
$\iff P = \frac{Q}{3} - \frac{50}{3}$.
Since the producers got taxed, they need to charge a higher price to cover their cost …
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