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Two linear demand curves go through the initial equilibrium, eg. One demand curve is less elastic than the other at eo. The original upward
Two linear demand curves go through the initial equilibrium, eg. One demand curve is less elastic than the other at eo. The original upward sloping supply curve also goes through ep. For which demand curve is the deadweight loss from a specific tax t greater? For which is the ratio of the deadweight loss (DWL) to the tax revenue (T) greater? Using the upward sloping supply curve, add two demand curves with different slopes that intersect at the initial equilibrium eo on the supply curve. 1.) Using the line drawing tool, draw a demand curve that passes through eo. Label this curve 'D. 2.) Using the line drawing tool, draw a second demand curve that passes through e, but that is less elastic than D. Label this curve 'D Carefully follow the instructions above, and only draw the required objects. p. $ per unit Po Qo Q. Units per week od 2
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