For this question, suppose the market for widgets is perfectly competitive and the government introduces a per-unit $1 tax on widgets. Post-tax, quantity of widgets sold in market equals 100. Why could the deadweight loss caused by the tax be greater than the tax revenue collected?
For this question, suppose the market for widgets is perfectly competitive and the government introduces a per-unit $1 tax on widgets. Post-tax, quantity of widgets sold in market equals 100. Why could the deadweight loss caused by the tax be greater than the tax revenue collected?
Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter4: Demand And Demand: Applications And Extensions
Section: Chapter Questions
Problem 13CQ
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For this question, suppose the market for widgets is
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