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Demand for apples is given by the function P=50-4q while supply is given by P=10+q. If a per-unit tax of $15 is placed on apples, Calculate the deadweight loss?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section5.A: Appendix: Price Elasticity And Tax Incidence

Problem 1AQ

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Question

Demand for apples is given by the function P=50-4q while supply is given by P=10+q. If a per-unit tax of $15 is placed on apples, Calculate the deadweight loss?

Definition Definition Cost to society created by market inefficiency when supply and demand are not in market equilibrium.

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