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Pub Econ Lecture 20 Optimal Taxation

Pub Econ Lecture 20 Optimal Taxation

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Published by Katherine Sauer

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Categories:Types, School Work
Published by: Katherine Sauer on Jan 04, 2012
Copyright:Attribution Non-commercial

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02/07/2014

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Public FinanceDr. Katie Sauer 
Optimal Taxation
 
I
n the absence of market failures, the market outcome isthe socially efficient outcome.Taxes cause behavior changes.Taxes reduce efficiency.
 
PriceQuantitySupplyDemandQP
At Qt, the value to buyers of the goodexceeds the cost of  production of thegood.forgone transactionsTotal surplus is notmaximized.-inefficient-DeadweightLoss
Supply + tax
tax
PtQtPp
Recall a tax on a good:

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