A) Per-unit tax is collected from sellers: equivalent to
increase in marginal costs. Graphically shift
supply up by the amount of the tax.
Buyers pay: PB, Sellers get: PS=PB-tax.
Quantity traded is QD(PB).
B) Per-unit tax is collected from buyers
Perfect Competition: Finish
Imperfect Competition and
BDF: Chapter 8, 9
FB: Chapter 10
Chapter 1 from "Competition Policy: Theory and
Practice by Massimo Motta, 2004 (posted)
HW 11 is posted, due on Wednesd
BDF: Chapter 8
FB: Chapter 6 and 8
HW 10 is posted, due on Wednesday, Nov. 25
Producer (firm) cares about
Costs (depend on technology, what inputs
(factors of production) it uses and