Suppose that inverse demand is given by P = 100 – 2QD and inverse supply by P = 25+Qs. Which of the following characterizes deadweight loss as a function of a per-unit tax T? Technical note: For simplicity, restrict attention only to the T for which tax revenue is positive.

Suppose that inverse demand is given by P = 100 – 2QD and inverse supply by P = 25+Qs. Which of the following characterizes deadweight loss as a function of a per-unit tax T? Technical note: For simplicity, restrict attention only to the T for which tax revenue is positive.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that inverse demand is given by P = 100 - 2QD and inverse supply by P = 25 + Qs.
Which of the following characterizes deadweight loss as a function of a per-unit tax T?
Technical note: For simplicity, restrict attention only to the T for which tax revenue is positive.
None of these answers
DWL(T)
O DWL(T) =
=
(25+7)²
100
=
(75-7)²
100
DWL(T)
O DWL(T) = 27²

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