a. Draw a supply and demand diagram with a tax on the sale of the good. Show

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a. Draw a supply and demand diagram with a tax on the sale of the good. Show the deadweight loss. Show the tax revenue.

b. How do the elasticities of supply and demand affect the deadweight loss of a tax? Why do they have this effect?

c. What happens to the deadweight loss and tax revenue when a tax is increased?

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Economics

ISBN: 9781473768543

5th Edition

Authors: Gregory Mankiw, Mark P. Taylor

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Question Posted: Apr 25, 2024 01:01 AM

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a. Draw a supply and demand diagram with a tax on the sale of the good. Show

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