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Suppose the market for dry cleaning has an inverse demand of p = 10 â€" 0.15q and an inverse supply curve (mc) of p = 0.05q, where p is the price per article of clothing and q is the quantity of clothing laundered. suppose the external marginal cost of dry cleaning is $1. if the government tries to correct the negative externality by placing a $1 tax on each laundered piece of clothing, buyers will pay and sellers will receive net of the tax.
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Suppose the market for dry cleaning has an inverse demand of p = 10 â€" 0.15q and an inverse supply...
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