The government decides to reduce the tax on the production of gasoline. Using a market (demand and supply) diagram, illustrate and fully explain the...
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The government decides to reduce the tax on the production of gasoline. Using a market (demand and supply)

diagram, illustrate and fully explain the impact of the tax reduction on the following:

 Prices paid by buyers/received by sellers

 Consumer surplus

 Producer surplus

 Social welfare 

PLEASE EXPLAIN CLEARLY

Top Answer

Impact of the tax reduction on the prices paid by buyers is that the buyers pay lesser price for a large quantity of goods... View the full answer

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