[5] The supply curve is horizontal at the price of 3. At this price quantity demanded is 40 units of the good. The government imposes a quantity tax of 1, to be paid by suppliers. As a result the supply curve shifts up as pictured below. Shade in the area representing the loss of consumer surplus. p 4 3 D q 30 40 new supply curve [6] In [5], what is the numerical value of the wet deadweigit loss to society? Net Deadweight Loss= 2

[5] The supply curve is horizontal at the price of 3. At this price quantity demanded is 40 units of the good. The government imposes a quantity tax of 1, to be paid by suppliers. As a result the supply curve shifts up as pictured below. Shade in the area representing the loss of consumer surplus. p 4 3 D q 30 40 new supply curve [6] In [5], what is the numerical value of the wet deadweigit loss to society? Net Deadweight Loss= 2

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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