Suppose that a market is described by the following supply and demand equations: Q³ = 2P QD=300-P A tax of T is place on buyers, so the new demand equation is QD=300-(P+T). The deadweight loss of a tax is the area of the triangle between the supply and demand curves. Recalling that the area of a triangle is 1/2"base height, which of the following functions of T is the deadweight loss? ⒸT²/3 2T/3 2*(300-T)/3 (300-T)/3

Suppose that a market is described by the following supply and demand equations: Q³ = 2P QD=300-P A tax of T is place on buyers, so the new demand equation is QD=300-(P+T). The deadweight loss of a tax is the area of the triangle between the supply and demand curves. Recalling that the area of a triangle is 1/2"base height, which of the following functions of T is the deadweight loss? ⒸT²/3 2T/3 2*(300-T)/3 (300-T)/3

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

Suppose that a market is described by the following supply and demand equations:
Q³ = 2P
QD=300-P
A tax of T is place on buyers, so the new demand equation is
QD = 300 - (P+T).
The deadweight loss of a tax is the area of the triangle between the supply and demand curves.
Recalling that the area of a triangle is 1/2"base height, which of the following functions of T is the
deadweight loss?
T²/3
2T/3
2*(300-T)/3
(300-T)/3

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