Unformatted text preview: producers, who have to accept lower prices in order to sell their goods In either case, producers and consumers pay different prices, and those prices differ by the amount of the tax
2/9/2009 Class 9 13 Which goods to tax? Efficiency costs of taxes in various markets can be compared Note: a tax of a given size will have a greater DWL if it generates a larger change in quantity traded What determines how significantly the tax distorts behavior?
Class 9 14 2/9/2009...
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