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The vertical intercept for the demand curve is at 500 and the vertical intercept for the supply curve is at 100. Initially, there is no tax on the market, and the airplane sells a quantity of 40 units at a price of $420. But at some point, because both production of and using the plane in play causes air pollution, the government puts a tax on the market. The tax is $80 per airplane, and with the tax the price received by sellers becomes $356, with a quantity of 32 units sold. Calculate producer surplus for this market after the tax is applied.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M91838221

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