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Suppose the market for widgets in Freedonia is perfectly competitive. Demand for widgets in Freedonia is given by QD = 100 - P and supply

Suppose the market for widgets in Freedonia is perfectly competitive. Demand for widgets in Freedonia is given by QD = 100 - P and supply of widgets in Freedonia is given by QS = P where quantity is in units per month and price is in dollars per unit. Freedonian government imposes a $20 per unit excise tax on widgets (ie the tax is paid by the producers.) calculate Deadweight loss created by this tax is:

a) 100

b) 200

c) 300

d) 400

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