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Consider the deadweight loss generated in each of the following cases: no tax, a tax of $20 per case, and a tax of $40 per
Consider the deadweight loss generated in each of the following cases: no tax, a tax of $20 per case, and a tax of $40 per case. On the following graph, use the black curve (plus symbols) to illustrate the deadweight loss in these cases. (Hint: Remember that the area of a triangle is equal to 5 X Base X Height. In the case of a deadweight loss triangle found on the graph input tool, the base is the amount of the tax and the height is the reduction in quantity caused by the tax.) 500 450 Deadweight Loss 400 350 300 250 DEADWEIGHT LOSS (Dollars) 200 150 100 50 O 5 10 15 20 25 30 35 40 45 50 TAX (Dollars per case) As the tax per case increases, deadweight loss
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