91707 - total Surp = A F Deadweight Loss=nada w/ tax CS=A...

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Econ 9/17/07 Supply and demand model market fails when total surplus is not maximized Chapter 8: taxes in the market look up MyxerTones $10 Tax on Sellers Pb=20, Qd = 7 Ps=10, Qs = 3 Pb=22, qd=6 ps=12, qs=4
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pb=24, qd=5 ps=14, qs=5 eq’m is reached. w/o tax consumer surplus= A+B+E prod. surplus=C+D+F govt= nada
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Unformatted text preview: total Surp = A F Deadweight Loss=nada w/ tax CS=A PD=D G=B+C TS=A+B+C+D DWL=E+F Four Sources of market failure: 1. When Goods are Free (lighthouse) 2. Externalities(2 nd hand smoke)(asking a question in class, everyone gets answer) 3. Market Pwr. 4. Info is not perfect. (buyers/sellers cannot receive adequate info)....
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This note was uploaded on 03/30/2008 for the course ECON 101 taught by Professor Balaban during the Fall '07 term at UNC.

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91707 - total Surp = A F Deadweight Loss=nada w/ tax CS=A...

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