(Scenario: The Market for Good X) Use Scenario: The Market for Good X.If a $1 per unit tax is imposed,the deadweight loss associated with the tax will be equal to (round all calculations to two decimal places) :

A) $1.00.
B) $20.00.
C) $0.50.
D) $0.60.

Question

Caitlin Smith · Accepted Answer

Final Answer : D, Explanation :  The deadweight loss can be calculated using the formula: (1/2) x (tax per unit/price before tax)^2 x change in quantity. Substituting the values from the scenario: (1/2) x (1/5)^2 x 80 = 0.60. Therefore, the deadweight loss associated with the tax is $0.60. Choice D is the correct answer.

(Scenario: The Market for Good X) Use Scenario: The Market for Good X.If a $1 per unit tax is imposed,the deadweight loss associated with the tax will be equal to (round all calculations to two decimal places) :

A) $1.00.
B) $20.00.
C) $0.50.
D) $0.60.

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Learning Objectives

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(Scenario: The Market for Good X) Use Scenario: The Market for Good X.If a $1 per unit tax is imposed,the deadweight loss associated with the tax will be equal to (round all calculations to two decimal places) :A) $1.00.B) $20.00.C) $0.50.D) $0.60.

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Learning Objectives

Learning Objectives

Related questions

(Scenario: The Market for Good X) Use Scenario: The Market for Good X.If a $1 per unit tax is imposed,the deadweight loss associated with the tax will be equal to (round all calculations to two decimal places) :

A) $1.00.
B) $20.00.
C) $0.50.
D) $0.60.