Lectures in Microeconomics-Charles W. Upton Tax Rates and DWL

A Simple Product D = 300, ,000p $10 300,000

Tax Rates and DWL A Simple Product D = 300, ,000p $10 300,000 The product costs nothing to produce so competition forces its price to zero. Q =

Tax Rates and DWL A Simple Product D = 300, ,000p $10 300,000

Tax Rates and DWL A $1 tax D = 300, ,000p $10 300,000 $1 270,000

Tax Rates and DWL The DWL D = 300, ,000p $10 300,000 $1 270,000

Tax Rates and DWL The DWL D = 300, ,000p $10 300,000 $1 270,000

Tax Rates and DWL A $2 tax D = 300, ,000p $10 300,000 $1 240,000 $2

Tax Rates and DWL A $2 tax D = 300, ,000p $10 300,000 $1 240,000 $2

Tax Rates and DWL A $2 tax D = 300, ,000p $10 300,000 $1 240,000 $2

Tax Rates and DWL A $2 tax D = 300, ,000p $10 300,000 $1 240,000 $2

Tax Rates and DWL A $2 tax D = 300, ,000p $10 300,000 $1 240,000 $2 The General Proposition: DWL is proportional to the square of the tax rate.

Tax Rates and DWL A $2 tax D = 300, ,000p $10 300,000 $1 240,000 $2 The General Proposition: DWL is proportional to the square of the tax rate.

Tax Rates and DWL End ©2004 Charles W. Upton