Suppose demand and supply of gasoline are given by the following linear functions: Qd = 100 - 20P QS = 50 + 1OP where Q is the quantity in millions of litres and P is the price per litre Suppose a tax of $1.10 per litre is imposed on gasoline. The deadweight loss equals: © A. $2.13 million © B. $2.70 million © C. $3.33 million © D. $4.03 million %3D

Suppose demand and supply of gasoline are given by the following linear functions: Qd = 100 - 20P QS = 50 + 1OP where Q is the quantity in millions of litres and P is the price per litre Suppose a tax of $1.10 per litre is imposed on gasoline. The deadweight loss equals: © A. $2.13 million © B. $2.70 million © C. $3.33 million © D. $4.03 million %3D

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter17: Taxation And Resource Allocation

Section: Chapter Questions

Problem 4TY

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