Look at the figure and table The Market for Taxi Rides. The figure represents a competitive market
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Question:
Look at the figure and table The Market for Taxi Rides. The figure represents a competitive market for taxi rides. If the government imposes an excise tax of $2 per ride (causing the supply curve to shift upward by that amount), then the government will collect tax revenues of _____, BUT the tax will cause a _____ deadweight loss to society.
$48 million, $6 million
$24 million, $4.5 million
$8 million, $1 million
$16 million, $2 million
Reference: Ref 7-6
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