Suppose that the market for cigarettes in a particular town


Suppose that the market for cigarettes in a particular town has the following supply and demand curves: Qs = P; Qd = 50 - P with quantities measured in thousands of units. Suppose the town council needs to raise $300,000 in revenue and decides to do it by taxing the cigarette market. What should the excise tax be in order to raise the required amount of money?

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Econometrics: Suppose that the market for cigarettes in a particular town
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