The price of automobiles currently equals both the marginal social benefit and the marginal social cost at
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The price of automobiles currently equals both the marginal social benefit and the marginal social cost at existing annual output. A tax is levied on the sale of cars. Assuming that the tax increases the marginal private cost of sellers, show how it will cause a loss in efficiency in the automobile market.
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When the price of automobiles equals both the marginal social benefit MSB and the marginal social cost MSC at the existing annual output it indicates ...View the full answer
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Related Book For 
Public Finance A Contemporary Application Of Theory To Policy
ISBN: 9780538754460
10th Edition
Authors: David N Hyman
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