In the diagram below, P₂ Po P A C D J C' vä P' Q₂ Q₁ S* S A per unit tax has been imposed on the supplier of P1P2 per unit shifting the supply curve from S to S* A per unit subsidy has been imposed on the supplier of P1P2 per unit shifting the supply curve from S to S* After a per unit tax has been imposed on the supplier of P1P2, the government receives P1P2*Q2 in tax revenue After a per unit subsidy has been given to the supplier of P1P2, the government pays out P1P2*Q2 in subsidies to the suppliers A per unit tax has been imposed on the supplier of P1P2 per unit. The new equilibrium shows a deadweight loss of C + C'

In the diagram below, P₂ Po P A C D J C' vä P' Q₂ Q₁ S* S A per unit tax has been imposed on the supplier of P1P2 per unit shifting the supply curve from S to S* A per unit subsidy has been imposed on the supplier of P1P2 per unit shifting the supply curve from S to S* After a per unit tax has been imposed on the supplier of P1P2, the government receives P1P2Q2 in tax revenue After a per unit subsidy has been given to the supplier of P1P2, the government pays out P1P2Q2 in subsidies to the suppliers A per unit tax has been imposed on the supplier of P1P2 per unit. The new equilibrium shows a deadweight loss of C + C'

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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