Use the following information to answer the question: Qs = 4/5 P Qd = 20 -...

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Use the following information to answer the question: Qs = 4/5 P Qd = 20 -...

Use the following information to answer the question: Qs = 4/5 P Qd = 20 - 4/5 P What is the size of deadweight loss created by a $2 tax imposed on each item sold? $3.60 1.6 items $1.80 0.8 items $0.80

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Answer 1

Answer #1

Deadweight loss created by $2 tax is $0.8.

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