F I R M S A N D M A R K E T S I I PMAP 8141: Economy, Society, - PowerPoint PPT Presentation

F I R M S A N D M A R K E T S I I PMAP 8141: Economy, Society, and Public Policy October 15, 2019 Fill out your reading report on iCollege!

P L A N F O R T O D A Y Surplus, taxes, incidence, and DWL Changes in supply and demand Price taking Escaping the price taking world

S U R P L U S , TA X E S , I N C I D E N C E , A N D D W L

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Consumer surplus Difference between WTP and price How good of a deal consumer gets Producer surplus Difference between price and WTA How good of a deal producer gets

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W H Y D O G O V E R N M E N T S T A X ? Raise revenue for services Redistribute resources Encourage or discourage consumption

W H A T H A P P E N S W H E N G O V E R N M E N T S T A X ? Revenue raised for public goods Resources redistributed Markets distorted; loss of efficiency

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<latexit sha1_base64="56utO6Q9JlMs+Y7yzYyr2mOSA=">ACNHicbZBLS0JBFMfn2svsZbVsMyRFIMm9kvSAQKpFixaKmYJXZO46uDcBzPnhnLxS7Xpe7SqRYuKtn2GxkdQ2h8G/vzOZw5fycQXIFpvhixufmFxaX4cmJldW19I7m5daf8UFJWpr7wZdUhignusTJwEKwaSEZcR7CK070c1iv3TCrue7fQD1jdJW2PtzgloFEjeVM6wW8f46zOI3NTDZXxLaduPqBJj7UdAxLjcgG1oMISG8wmBlL41wjmTIz5kh41lgTk0ITFRrJ7vp09BlHlBlKpZgD1iEjgVLBwg4VCwjtkjaraesRl6l6NLp6gPc0aeKWL/XzAI/o74mIuEr1XUd3ugQ6aro2hP/VaiG0TuoR94IQmEfHi1qhwODjYS4ySWjIPraECq5/iumHSIJBR10QodgTZ8a8rZzGnGKh6l8heTNOJoB+2iA2ShY5RH16iAyoiB/SM3tC78Wi8Gh/G57g1ZkxmtEfGV/f07qhg=</latexit> <latexit sha1_base64="56utO6Q9JlMs+Y7yzYyr2mOSA=">ACNHicbZBLS0JBFMfn2svsZbVsMyRFIMm9kvSAQKpFixaKmYJXZO46uDcBzPnhnLxS7Xpe7SqRYuKtn2GxkdQ2h8G/vzOZw5fycQXIFpvhixufmFxaX4cmJldW19I7m5daf8UFJWpr7wZdUhignusTJwEKwaSEZcR7CK070c1iv3TCrue7fQD1jdJW2PtzgloFEjeVM6wW8f46zOI3NTDZXxLaduPqBJj7UdAxLjcgG1oMISG8wmBlL41wjmTIz5kh41lgTk0ITFRrJ7vp09BlHlBlKpZgD1iEjgVLBwg4VCwjtkjaraesRl6l6NLp6gPc0aeKWL/XzAI/o74mIuEr1XUd3ugQ6aro2hP/VaiG0TuoR94IQmEfHi1qhwODjYS4ySWjIPraECq5/iumHSIJBR10QodgTZ8a8rZzGnGKh6l8heTNOJoB+2iA2ShY5RH16iAyoiB/SM3tC78Wi8Gh/G57g1ZkxmtEfGV/f07qhg=</latexit> <latexit sha1_base64="56utO6Q9JlMs+Y7yzYyr2mOSA=">ACNHicbZBLS0JBFMfn2svsZbVsMyRFIMm9kvSAQKpFixaKmYJXZO46uDcBzPnhnLxS7Xpe7SqRYuKtn2GxkdQ2h8G/vzOZw5fycQXIFpvhixufmFxaX4cmJldW19I7m5daf8UFJWpr7wZdUhignusTJwEKwaSEZcR7CK070c1iv3TCrue7fQD1jdJW2PtzgloFEjeVM6wW8f46zOI3NTDZXxLaduPqBJj7UdAxLjcgG1oMISG8wmBlL41wjmTIz5kh41lgTk0ITFRrJ7vp09BlHlBlKpZgD1iEjgVLBwg4VCwjtkjaraesRl6l6NLp6gPc0aeKWL/XzAI/o74mIuEr1XUd3ugQ6aro2hP/VaiG0TuoR94IQmEfHi1qhwODjYS4ySWjIPraECq5/iumHSIJBR10QodgTZ8a8rZzGnGKh6l8heTNOJoB+2iA2ShY5RH16iAyoiB/SM3tC78Wi8Gh/G57g1ZkxmtEfGV/f07qhg=</latexit> <latexit sha1_base64="56utO6Q9JlMs+Y7yzYyr2mOSA=">ACNHicbZBLS0JBFMfn2svsZbVsMyRFIMm9kvSAQKpFixaKmYJXZO46uDcBzPnhnLxS7Xpe7SqRYuKtn2GxkdQ2h8G/vzOZw5fycQXIFpvhixufmFxaX4cmJldW19I7m5daf8UFJWpr7wZdUhignusTJwEKwaSEZcR7CK070c1iv3TCrue7fQD1jdJW2PtzgloFEjeVM6wW8f46zOI3NTDZXxLaduPqBJj7UdAxLjcgG1oMISG8wmBlL41wjmTIz5kh41lgTk0ITFRrJ7vp09BlHlBlKpZgD1iEjgVLBwg4VCwjtkjaraesRl6l6NLp6gPc0aeKWL/XzAI/o74mIuEr1XUd3ugQ6aro2hP/VaiG0TuoR94IQmEfHi1qhwODjYS4ySWjIPraECq5/iumHSIJBR10QodgTZ8a8rZzGnGKh6l8heTNOJoB+2iA2ShY5RH16iAyoiB/SM3tC78Wi8Gh/G57g1ZkxmtEfGV/f07qhg=</latexit> S : P = 2 + 0 . 25 Q D : P = 20 − 0 . 5 Q S ��� : P = 2 + 0 . 25 Q + 5