Prices and quantities are determined by supply S = 0.5p – 20 and demand D =...

Prices and quantities are determined by supply S = 0.5p – 20 and demand D = 140 – 0.5p. Next month the government will introduce a tax of 40 dollars per unit. Provide a supply and demand diagram to illustrate and quantify the impact of this tax. Shade in the area representing government tax revenues in your diagram. With the tax in place government will earn tax revenues equal to __________ dollars.

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Rahul Sunny answered 1 year ago

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