Algebra

Quadratic equations Solutions

To meet its commitments under the Montreal Protocol, the United States implemented certain market-based policy instruments, including an excise tax on ozone depleters. Consider the following market for CFC-12 before the excise tax is imposed, where P is $ per pound.
Q=18.40-0.5P Q=10.00 +2.5P
Now assume that a 60 cent excise tax is used, which shifts the supply curve to the left.
a. Find the new supply curve.
b. Find the equilibrium price before and after the tax is implemented.
c. What do you conclude about who bears the primary burden of the tax buyers or sellers?