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1. The vertical distance between points A and B represents a tax in the market. What...

1. The vertical distance between points A and B represents a tax in the market.

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  1. What is total tax?
  2. What are the buyers’ and sellers’ per-unit tax burden?
  3. How much deadweight loss (DWL) results from this tax?
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Answer #1

F G G XE Demand Quantity Total tax= Distance b/w A and B Total tax Revenue = Area of a Rettugle AB CD = length x Breadth a AD

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