Two linear demand curves go through the initial equilibrium, (e_{1}). One demand curve is less elastic than

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Two linear demand curves go through the initial equilibrium, \(e_{1}\). One demand curve is less elastic than the other at \(e_{1}\). The original horizontal supply curve also goes through \(e_{1}\). For which demand curve is the deadweight loss from a specific tax \(t\) greater? For which is the ratio of the deadweight loss \((D W L)\) to the tax revenue \((T)\) greater?

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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