thank u so much for ur videos! always a big help! 💯 i have a question... how about when there is a lump sum tax, do I just add the value of lump sum tax to the MC equation (like what u did on the specific tax/per-unit tax) or is there a different process for that?
You will treat a lump sum tax like a fixed cost of production. A lump sum tax does not affect the firm's profit maximizing price or quantity of output.
The MC curve without taxes represents the actual or "real" (social cost) cost of bringing one more unit of the good to the market. When analyzing negative externalities, we similarly use the social cost curve to get the deadweight loss.
What would be the tax revenue? Would it just be 4*4 due to quantity of 4 produced through maximization of profits with the tax and 4 is a tax revenue of one unit?
@@EconomicsinManyLessons The burden of the tax in this example is 3$ per unit of the good on the producer and $1 paid by the consumers, is that correct?
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You are the only one who gives examples using numbers.
Thank you very much for your help. Please continue to make more examples!
Hi,
I was searchig for a exact type of example to understand the effect of tax and finally found yours.
Thanks a lot for your good work.
Plz sir upload more videos.. We are the needy one who need this important information 😊😊
Big thanks, cleared the taxation impact on price and output.
It would be amazing if you could show how to get CS, PS and DWL only from the calculations:)
thanks. well, I think the PS=8*4*0.5, with tax. the [(16-8)*4] should be the tax revenue.
Thank you so much. I am solving side by side
Many thanks! But Do we need to account for the government revenue when calculating the DWL?
can't thank you enough, super helpful
You are doing great for keep doing
thank u so much for ur videos! always a big help! 💯
i have a question... how about when there is a lump sum tax, do I just add the value of lump sum tax to the MC equation (like what u did on the specific tax/per-unit tax) or is there a different process for that?
You will treat a lump sum tax like a fixed cost of production. A lump sum tax does not affect the firm's profit maximizing price or quantity of output.
Here is an example: ruclips.net/video/0zazUL7qaLI/видео.html
@@EconomicsinManyLessons thank you so much! 💖
excuse me so basically if we Imposing a quantity tax on a monopolist will always cause the market price to increase by the amount of the tax?
Sir , why the deadweight loss after the tax is placed still limited by old MC curve?
The MC curve without taxes represents the actual or "real" (social cost) cost of bringing one more unit of the good to the market. When analyzing negative externalities, we similarly use the social cost curve to get the deadweight loss.
Thanks so much dude, you saved me from failing hahaha :) LOL XD
I am glad to hear!
The burden of the tax in this example is 3$ per unit of the good on the producer and $1 paid by the consumers, is that correct?
Yes, consumers are paying $1 more per unit and the producer receives $3 less per unit.
Can you please tell how to calculate that ?
What would be the tax revenue?
Would it just be 4*4 due to quantity of 4 produced through maximization of profits with the tax and 4 is a tax revenue of one unit?
And is that revenue reflected anywhere on the graph?
Yes, you are correct: $16 of tax revenue.
@@BonnieX21 it should be the parallelogram enclosed by new mc, old mc, q=0 and q=4
@@EconomicsinManyLessons The burden of the tax in this example is 3$ per unit of the good on the producer and $1 paid by the consumers, is that correct?
What would be the producer burden of the tax?
Or what should be the incidence of the tax on the monopolist then?