Calculates the deadweight loss when an ad valorem tax is imposed.
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Calculates deadweight and other effects after taxation under an ad valorem tax system.
Consider the demand function D = b + aP and the supply function S = f + cP.
Calculate the transaction price, transaction quantity, and deadweight loss (excess burden) after an ad valorem tax with rate t is imposed.
Enter 0.1 for a 10% tax rate and 0.08 for an 8% tax rate.
Enter positive values for b and c, a negative value for a, and either a negative value or zero for f.
Please do not confuse this with an ad valorem tax.
Calculate the transaction price, transaction quantity, and deadweight loss (excess burden) after an ad valorem tax with rate t is imposed.
Enter 0.1 for a 10% tax rate and 0.08 for an 8% tax rate.
Enter positive values for b and c, a negative value for a, and either a negative value or zero for f.
Please do not confuse this with an ad valorem tax.
| Transaction price after ad valorem tax is applied | |
| Transaction Volume After Ad Valorem Tax Is Applied | |
| Dead load |
Depending on the economics problem, the word “inverse” may be omitted from “inverse demand function” or “inverse supply function.”
Please be careful not to confuse these terms when entering your answers.
Also, pay close attention to the signs (especially negative signs).
Do not confuse this with a volume-based tax.
Please be careful not to confuse these terms when entering your answers.
Also, pay close attention to the signs (especially negative signs).
Do not confuse this with a volume-based tax.
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