ECON 221 1st Edition Lecture 10 Outline of Last Lecture I. Determinants of the Price elasticity of supplya. How the price elasticity of supply can varyII. Consumer and Producer Surplusa. Derive the demand scheduleb. WTP and the demand curvec. Consumer Surplusd. CostOutline of Current LectureI. Evaluating the Market EquilibriumII. Taxes and Subsidesa. Taxationb. A tax on sellersCurrent LectureChapter 4 Extension: Consumer and Producer Surplus (cont,)- Market is not efficientThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.o Efficientnot having too much or too little of produced products (having the supply and demand equal)o Not sufficient because CS and PS are not equalChapter 6: Taxes and SubsidiesTaxation:- Tax Incidence: the manner in which the burden of a tax is shared among participants in amarket- Tax: it drives a wedge between the buyer’s price and the seller’s price- Wedge is the same b/w the prices- In the new equilibrium, buyers and sellers share the burden of the
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