Question
It is given that Qd = 300 - P, Qs = Q/2. Government
imposes specific tax in such a way that it maximizes the total tax revenue. Then find out the DWL in such a situation.Solution
We know that when tax is imposed, Pd = Ps + t Pd – Ps = t 300 – Q = 2Q + t Q* = 100 – t/3 Tax Revenue = t.Q = 100t – t2 / 3 For maximizing tax revenue, 100 – 2t/3 = 0 So, t = 150 Q* = 100 – 50 = 50 Once you get that quantity, you can get DWL (area of triangle) But for that you also need to know the optimal quantity without tax. Equating demand and supply functions, 300 – P = P/2 P = 200 Which implies, Q = 100 DWL = ½ * 150* (100-50) = 3750
In which Japanese city was a bust of Mahatma Gandhi unveiled by External Affairs Minister S. Jaishankar? Â
With reference to the Population Census–2027 in India, consider the following statements:
1. The 2027 Census will be conducted in two phases an...
Which ministry released a commemorative stamp in honor of Indian playback singer Mukesh Chand Mathur on his 100th birth anniversary in July 2024?
What is the maximum repayment period for public deposits under the new HFC guidelines effective January 2025?
Which two sectors were the focus of the initial SEBI stress tests before expanding industrywide?
Which species was declared as Vulnerable on the IUCN Red List recently?
Match the following institutions with the government’s FY26 capital-raising plan:
Which ministry is responsible for the implementation of PMGSY?
Who took over the rotating presidency of the Council of the European Union for six months?
Which financial platform did NPCI establish to handle bill payment transactions?
