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Real-World Applicationshard
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A firm faces a downward-sloping demand curve P=100−QP = 100 - QP=100−Q and a total cost function C(Q)=20Q+10C(Q) = 20Q + 10C(Q)=20Q+10. If the government imposes an ad valorem tax of τ=20%\tau = 20\%τ=20%, what is the new profit-maximizing quantity Q∗Q^*Q∗?