2. Suppose that the demand curve for cigarettes is given by y(p) = 50 - P and the supply curve is given by y(p) = P. The government wants to raise $300 in revenues by taxing the cigarette market. Calculate the amount of the excise tax required to accomplish the government's goal.

Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
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2. Suppose that the demand curve for cigarettes is given by y(p) = 50 – P
and the supply curve is given by y(p) = P. The government wants to raise
$300 in revenues by taxing the cigarette market. Calculate the amount of
the excise tax required to accomplish the government's goal.
Transcribed Image Text:2. Suppose that the demand curve for cigarettes is given by y(p) = 50 – P and the supply curve is given by y(p) = P. The government wants to raise $300 in revenues by taxing the cigarette market. Calculate the amount of the excise tax required to accomplish the government's goal.
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