ECO100Y1 Lecture Notes - Demand Curve, Deadweight Loss

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6 Dec 2012
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In the market for widgets, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the market for widgets is 200 per month when there is no tax. Then a tax of per widget is imposed. The price paid by buyer s increases by and the after-tax price received by sellers falls by . The government is able to raise per month in revenue from the tax.

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