Question
D(p) = A ap, A,a > 0. 1-) The state imposes a tax on t while p is kept constant and it still holds at
D(p) = A ap,
A,a > 0.
1-) The state imposes a tax on t while p is kept constant and it still holds at p + t 2-) Establish the ratio between DWL and central government revenue (DWL / tax revenue) taegter). Interpret, in particular how does this depend on a. Why?
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Managerial Economics and Strategy
Authors: Jeffrey M. Perloff, James A. Brander
2nd edition
134167879, 134167872, 9780134168319 , 978-0134167879
