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A graph of price, P, versus quantity, Q, shows a supply curve, S, rising linearly from point (0, 4) to (50, 44), and a demand
A graph of price, P, versus quantity, Q, shows a supply curve, S, rising linearly from point (0, 4) to (50, 44), and a demand curve, descending linearly from point (0, 44) to (52, 2). The curves intersect at (25, 24). Point A lies on the demand curve at point (15, 32). Point B lies on the supply curve at point (15, 16). Refer to Figure 8-3. The deadweight loss associated with this tax amounts to $80, and this figure represents the amount by which tax revenue to the government exceeds the combined loss of producer and consumer surpluses. $80, and this figure represents the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers. $60, and this figure represents the amount by which tax revenue to the government exceeds the combined loss of producer and consumer surpluses. $60, and this figure represents the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers
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