Chapter 07 & 6 Summary - A Few Loose Ends on Ch.6 and Ch7 When will a tax cause no deadweight loss P S Pbuyer D tax Pseller D Q1 Q0 Q When will a

Chapter 07 & 6 Summary - A Few Loose Ends on Ch.6 and Ch7...

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A Few Loose Ends on Ch.6 and Ch7
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When will a tax cause no deadweight loss ? D S P Q Q 0 Q 1 D P buyer P seller tax
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When will a tax cause no deadweight loss ? D S P Q Q 0 P buyer P seller tax When S or D is perfectly inelastic Why? No reduction in quantity traded
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True or false ? If a tax raises no revenue it will produce no deadweight loss No tax revenue D = 0 FALSE A large enough tax can wipe out a market (Q =0)
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When will a tax cause no deadweight loss ?
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