(Figure: Tax Incidence) Use Figure: Tax Incidence. Based on the figure, the deadweight loss of an excise tax is likely...

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Figure: Tax Incidence Pand A Price (per unit) Price (per unit) Pe Q2 Q3 Quantity (per period) Q2Q Quantity (per period) Panel

(Figure: Tax Incidence) Use Figure: Tax Incidence. Based on the figure, the deadweight loss of an excise tax is likely to be greater in panel _____ than in panel _____.

C; A

C; D

B; A

D; A

business economics

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Answer 1

Answer #1

Ans) Firstly, flatter the curve, the more elastic it is. The steeper the curve, the less elastic it is or more inelastic it is.

If curve is highly elastic, there will be more deadweightloss . If curve is less elastic, the deadweightloss will be less.

Figure: Tax Incidence Pand Price (per unit) Price (per unit) SU Pe Q2 Q3 Quantity (per period) Q2Q Quantity (per period) Pane

Deadweightloss A>C>D>B

Option b.

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Answer 2

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