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

2. A Simple Product D = 300,000- 30,000p $10 300,000

3. Tax Rates and DWL A Simple Product D = 300,000- 30,000p $10 300,000 The product costs nothing to produce so competition forces its price to zero. Q = 300000

4. Tax Rates and DWL A Simple Product D = 300,000- 30,000p $10 300,000

5. Tax Rates and DWL A $1 tax D = 300,000- 30,000p $10 300,000 $1 270,000

6. Tax Rates and DWL The DWL D = 300,000- 30,000p $10 300,000 $1 270,000

7. Tax Rates and DWL The DWL D = 300,000- 30,000p $10 300,000 $1 270,000

8. Tax Rates and DWL A $2 tax D = 300,000- 30,000p $10 300,000 $1 240,000 $2

9. Tax Rates and DWL A $2 tax D = 300,000- 30,000p $10 300,000 $1 240,000 $2

10. Tax Rates and DWL A $2 tax D = 300,000- 30,000p $10 300,000 $1 240,000 $2

11. Tax Rates and DWL A $2 tax D = 300,000- 30,000p $10 300,000 $1 240,000 $2

12. Tax Rates and DWL A $2 tax D = 300,000- 30,000p $10 300,000 $1 240,000 $2 The General Proposition: DWL is proportional to the square of the tax rate.

13. Tax Rates and DWL A $2 tax D = 300,000- 30,000p $10 300,000 $1 240,000 $2 The General Proposition: DWL is proportional to the square of the tax rate.

14. Tax Rates and DWL End ©2004 Charles W. Upton