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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

Microeconomics: Principles & Policy
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter17: Taxation And Resource Allocation
Section: Chapter Questions
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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
Transcribed Image Text: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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