Lecture Deadweight losses losses in society o Cannot gain back o Due to tax o Would change equilibrium When you double the tax o Causes deadweight loss to more than double Summary When a tax increases DWL rises even more Implication When tax rates are low raising them won t cause much harm and lowering them doesn t bring much benefit When tax rates are high raising them is very harmful and cutting them is A 1 change in tax size at 1 of a curve will have less deadweight loss than when curve is at 80 when it is more sensitive The Laffer curve shows the relationship between the size of the tax and tax very beneficial revenue o Change in tax size is elastic at the peak which causes the deadweight loss to increase the highest opposed to it being a little farther than the peak Chapter 9 Pw the world price of a good the price that prevails in world markets PD domestic price without trade
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