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Question 12 Tries remaining:1 Points out of 7.70 S Tax $40 Flag question $30 $20 $10 2 4 尚 8 Calculate the Deadweight Loss that this per unit tax would generate. (Do not include a $ sign in your response. Round to the nearest two decimal places if necessary.) Answer: Check

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Answer #1

Before tax

Equilibrium price is $ 20 and Equilibrium quantity is 5.

After tax

Equilibrium price is $ 30 and Equilibrium quantity is 3.

Deadweight Loss(DWL) due to tax is equal to :

  

Where   Q* denote quantity before tax

Qt denote quantity after tax

  2 15 x(5-3) 15 ー×

Therefore, the deadweight Loss that this per unit tax would generate would be equal to 15.

  

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