Answered: A tax of $1 in the market for widgets…

A tax of $1 in the market for widgets causes a deadweight loss of $2. If the tax is raised to $3 then deadweight loss will be approximately: A) 18 B) 6 C) none of these answers D) 12

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

A tax of $1 in the market for widgets causes a deadweight loss of $2. If the tax is raised to $3 then deadweight loss will be approximately: A) 18 B) 6 C) none of these answers D) 12

Definition Definition Cost to society created by market inefficiency when supply and demand are not in market equilibrium.

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