5. The market demand for super-sticky glue is Q = 240 – 6P and the market supply is Q=-60 + 4P. a.Calculate the deadweight loss of a tax of S4 per unit levied on producers of super- sticky glue. b. How does deadweight loss change if the tax is levied on consumers of supersticky glue?

5. The market demand for super-sticky glue is Q = 240 – 6P and the market supply is Q=-60 + 4P. a.Calculate the deadweight loss of a tax of S4 per unit levied on producers of super- sticky glue. b. How does deadweight loss change if the tax is levied on consumers of supersticky glue?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

5. The market demand for super-sticky glue is Q = 240 - 6P and the market supply is
Q = -60 + 4P.
a.Calculate the deadweight loss of a tax of S4 per unit levied on producers of super-
sticky glue.
b. How does deadweight loss change if the tax is levied on consumers of
supersticky glue?

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