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on trade? ?Who bear the burden of the tax, sellers or buyers? ? Specific Tax: Tax of a certain amount of money per unit sold. ?Subsidy: Payments reducing the buyer’s price below the seller’s price。 i,.e., a negative tax. Tax Levied on Sellers or Buyers ?Suppose the government impose a tax of t per unit of one goods and collect it from sellers. Given the market price P, the market supply bees ?Suppose the government impose a tax of t per unit of one goods and collect it from buyers. Given the market price P, the market demand bees 0( ) ( )PsS P F t d?????( ) ( )dPD P F t d??????Tax Levied on Sellers or Buyers ?The market equilibrium price can be deduced from the following equation when tax is levied on sellers ?The market equilibrium price can be deduced from the following equation when tax is levied on buyers 10 ( ) ( )Ps d ePF t d F d P? ? ? ??? ? ???20 ( ) ( )Ps d ePF d F t d P? ? ? ??? ? ???Tax Levied on Sellers or Buyers ?The relationship between market equilibrium price when tax is levied on sellers and the market equilibrium price when tax is levied on buyers can be deduced as following ?The market equilibrium quantity when tax is levied on sellers is always equ