To meet its commitments under the Copenhagen Agreement, the U.S. has to implement an excise tax on ozone depleters such as the chemical CFC-12. Originally, the market for CFC-12 is:

To meet its commitments under the Copenhagen Agreement, the U.S. has to implement an excise tax on ozone depleters such as the chemical CFC-12. Originally, the market for CFC-12 is:
Demand Qd = 18.4 – 0.5P Supply Qs = 10 + 2.5P
After a 60 cent (0.6) excise tax is imposed, the supply curve shifts to:
Post-tax Supply Qst = 8.5 + 2.5P
a) What is the equilibrium price P before the tax is imposed?
b) What is the equilibrium price P after the tax is imposed?
c) Who bears the bigger burden of the tax – buyers or sellers?
d) What is the deadweight loss of this tax?
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