Suppose that a government imposes a tax on a product of £9.3 per unit. As a result of this tax, the equilibrium quantity of the good decreases by 18.7 units and the equilibrium price increases by 80p. What is the dead weight loss induced by this tax in £?

Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter17: Taxation And Resource Allocation
Section: Chapter Questions
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Suppose that a government imposes a tax on a product of £9.3 per unit. As a
result of this tax, the equilibrium quantity of the good decreases by 18.7 units
and the equilibrium price increases by 80p. What is the dead weight loss
induced by this tax in £?
Transcribed Image Text:Suppose that a government imposes a tax on a product of £9.3 per unit. As a result of this tax, the equilibrium quantity of the good decreases by 18.7 units and the equilibrium price increases by 80p. What is the dead weight loss induced by this tax in £?
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