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Pq dwl tax amount - PowerPoint PPT Presentation

A is apples and Z is all other goods.

Z. a. b. Tax on Apples. A. A is apples and Z is all other goods. A tax on apples rotates the budget constraint inwards and leads to a new equilibrium at pt. a. But a tax on Apples is inefficient compared to a tax on all goods (consumption tax).

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Pq dwl tax amount - PowerPoint PPT Presentation

A is apples and Z is all other goods.