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Question 5 Consider the market for rice, which is perfectly competitive. Aggregate supply and demand are respectively given by Qs -5P 20 and 120-2P, (a) Find the (short-run) equilibrium price and quantity in this market. (6 marks) If the government imposes a tax of S10 per unit sold in this market. Find the quantity sold after the tax is imposed. (b) (7 marks) (c) Compute the deadweight loss imposed by the tax. (7 marks)

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Date / Page No.:- . Eqwilibri 12.0-20 가 140 5(20-2 120 40 -80 No lo tax is fn 12.0.60 nita 120 uni ta also wnt La Taith ts the bird that feels the light when e dawn ls stit dark.--Rablndranath Tagor

When a tax is imposed, it increases the tax revenue of the government and the price of the commodity.

Dead weight loss is a loss that the economy has to intake when the economy achieves equilibrium. It is an economic burden to the economy.

Page No.. A 8 ound $ 140

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