Here is the diagram The Harberger Triangle Price for the changes to market price and quantity...
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Here is the diagram The Harberger Triangle Price for the changes to market price and quantity with a tax. The Harberger Triangle Quantity Supply (with taxes) Supply (without taxes) Demand Assuming that t, p, and qi remain the same, is the deadweight loss bigger/smaller/same if the demand curve is more elastic? What about if the supply curve is more elastic? What about both? Compared to a typical good, what are the implications for consumer surplus and deadweight loss for a tax on tobacco? Is a tax on tobacco proportional, regressive, or progressive? Here is the diagram The Harberger Triangle Price for the changes to market price and quantity with a tax. The Harberger Triangle Quantity Supply (with taxes) Supply (without taxes) Demand Assuming that t, p, and qi remain the same, is the deadweight loss bigger/smaller/same if the demand curve is more elastic? What about if the supply curve is more elastic? What about both? Compared to a typical good, what are the implications for consumer surplus and deadweight loss for a tax on tobacco? Is a tax on tobacco proportional, regressive, or progressive?
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Answer Dead weight loss will be larger is the price elasticity of demand or supply is more elastic B... View the full answer
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