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Suppose a tax of $0.10 per unit on a good creates a deadweight loss of $100. if the tax increased to $0.25 per unit, the deadwight loss from the new tax would be

Answer :

You would divide 0.25 by 0.10 (0.25÷0.10) which is 2.5. Then you would take 2.5 and multiply by 100 to get 250. So the answer is 250.

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