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Suppose that eggs market has a linear upward-sloping supply curve and a linear downward-sloping demand curve. If the size of tax on eggs has increased
Suppose that eggs market has a linear upward-sloping supply curve and a linear downward-sloping demand curve. If the size of tax on eggs has increased from 1 dollar to 1.2 dollar per dozen eggs, the deadweight loss of the tax
a. increases by less than 20 percent and may even decline. b. increases by exactly 20 percent. c. increases by more than 20 percent.
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