Lectures in Microeconomics-Charles W. Upton Taxing a Competitive Industry.

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Presentation transcript:

Lectures in Microeconomics-Charles W. Upton Taxing a Competitive Industry

Competitive Diversity How can cost functions differ? Economic and Accounting Profits Taxing a Competitive Industry Consumer and Producer Surplus

Taxing a Competitive Industry A Tax with Horizontal Long Run Supply Curve D p min Q Q* T P min + T

Taxing a Competitive Industry Upward Sloping Supply Curve D Q S P

Taxing a Competitive Industry A Tax Increase D Q S P S+T T

Taxing a Competitive Industry It Gets Shifted D Q S P S+T T PCPC PSPS Q*

Taxing a Competitive Industry How Much Gets Passed

Taxing a Competitive Industry How Much Gets Passed

Taxing a Competitive Industry End ©2006 Charles W. Upton