Use calculus to show that an increase in a specific sales tax t reduces quantity less and
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Use calculus to show that an increase in a specific sales tax t reduces quantity less and tax revenue more, the less elastic the demand curve. (The quantity demanded depends on its price, which in turn depends on the specific tax, Q(ρ(τ)), and tax revenue is R = r (τ)Q(ρ(τ))?
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Related Book For
Microeconomics Theory and Applications with Calculus
ISBN: 978-0133019933
3rd edition
Authors: Jeffrey M. Perloff
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