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Unformatted text preview: When will a trade occur? Compensating and Equivalent Variation After a change in prices, Compensating Variation (CV) is how much money an individual would have to get (or have taken away) to be indifferent to the change in prices Equivalent Variation (EV) is how much money an individual would be willing to pay (or be paid) in order to face the original prices CV, EV, and Inverse demand curves Tax revenue and deadweight loss When is there no deadweight loss? Deadweight loss and the elasticity of substitution Calculating deadweight loss Calculating deadweight loss 2...
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This note was uploaded on 05/13/2010 for the course ECON 105D taught by Professor Cur during the Fall '09 term at Duke.
 Fall '09
 CUR
 Microeconomics, Utility

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