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6. Suppose the demand equation can be represented as QD = 1200 – 10p and the...

6. Suppose the demand equation can be represented as QD = 1200 – 10p and the Supply equation by Qs= 10p.

a. Solve for the equilibrium price and quantity.

b. Say an excise tax of $5 was placed on the buyers. Solve for the price buyers pay, price that sellers receive, and the quantity sold in the market after the tax. Show your work and results graphically.

c. Find the deadweight loss, consumer surplus, producer surplus, consumer surplus, and tax revenue after the implementation of the $5 tax. Make sure to show your work.

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