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Business, 05.08.2019 21:20 thelonewolf5020

Assume the supply curve for diapers is a typical, upward-sloping straight line, and the demand curve for diapers is a typical, downward-sloping straight line. suppose the equilibrium quantity in the market for diapers is 1,000 per month when there is no tax. then a tax of $0.50 per diaper is imposed. the effective price paid by buyers increases from $1.50 to $1.90 and the effective price received by sellers falls from $1.50 to $1.40. the government’s tax revenue amounts to $475 per month. which of the following statements is correct? a) after the tax is imposed, the equilibrium quantity of diapers is 900 per month. b) the tax causes a decrease in consumer surplus of $380.c) the demand for diapers is more elastic than the supply of diapers. d) the deadweight loss of the tax is $12.50.

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Assume the supply curve for diapers is a typical, upward-sloping straight line, and the demand curve...
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