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Unformatted text preview: for producers 6. The green-shaded area represents governments tax revenue, eliminating any producer & consumer surplus: $4.90 3.90 = $1.00 x 3.7 Bil. packs = $3.7 Bil. 7. (Yellow-shaded area) Some deadweight loss occurs also because at $4.00 per pack, without a tax, 4 billion packs could have been sold 8. (Buyers) Consumer surplus experiences the greatest amount of deadweight loss because they are experiencing the most of burden of the tax ($.90) while sellers experience loss of some sales, from 4 billion packs to 3.7billion Fig 4-11: Similar result with a $.10 per gallon gasoline tax; $.08 paid by consumers, $.02 by suppliers...
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This note was uploaded on 02/06/2012 for the course ECON 111 taught by Professor Risnit during the Spring '11 term at SUNY Suffolk.
- Spring '11