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Question: you are given the following information:        Qs = 100 + 3P        Qd =...

Question:

you are given the following information:

       Qs = 100 + 3P

       Qd = 400 - 2P

From this information compute equilibrium price and quantity. Now suppose that a tax is placed on buyers so that

       Qd = 400 - 2(P + T).

If T = 15, solve for the new equilibrium price and quantity. (Note: P is the price received by sellers and P + T is the price paid by buyers.) Compare these answers for equilibrium price and quantity with your first answers. What does this show you?

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