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30-05-2023
Business

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Question 1 (Tax question)
The demand and supply for bicycles is given by:
d = 1000 - 10P
s = 2P - 20
The government imposes a per unit tax of Tx = $12. What is new CS and PS? What is the change in
consumer and producer surplus compared to equilibrium? What is the Deadweight Loss? What is
government revenue? Graph your results.

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