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avinash0312 avinash0312
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5 years ago Edited: 5 years ago, bio_man
Figure 18-2



Figure 18-2 shows a demand curve and two sets of supply curves, one set more elastic than the other.


Refer to Figure 18-2. If the government imposes an excise tax of $1.00 on every unit sold, what is the size of the deadweight loss, if there is any?

• the area adc if the supply curve is S0 and the area bec if the supply curve is S1.

• the area afcd if the supply curve is S0 and the area bfce if the supply curve is S1.

• the area becf under either supply curve.

• There is no deadweight loss; revenue raised is used to fund government projects.
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Microeconomics

Microeconomics


Edition: 7th
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#1
5 years ago
the area adc if the supply curve is S0 and the area bec if the supply curve is S1.
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