Friday

September 19, 2014

September 19, 2014

Posted by **Anil** on Monday, November 14, 2011 at 3:21pm.

Suppose local govt decides that a tax is the best way to address the inefficiency created by outdoor concerts. Assuming the social cost curve and the private cost curve are parallel to each other, how much does the tax on concerts have to be to achieve the socially optimal outcome?

Econ - urgent please help - bobpursley, Monday, November 14, 2011 at 8:43am

If one adds a tax ,then the private cost curve moves upward to the social cost curve, but will not cross it ever, it could be colinear. There would not be an optimals solution of attendance, as the marginal revenue would always equal mariginal costs.

So the tax to get to this is the difference between the private cost curve and the social cost curve AT ANY POINT, as it is constant.

***** How much of the tax is borne by consumers of the concerts? How do I figure this? Thank you.

**Answer this Question**

**Related Questions**

Econ please help - Suppose local govt decides that a tax is the best way to ...

Econ - urgent please help - Suppose local govt decides that a tax is the best ...

government - five purposes of govt...protection,order,conflict resolution,econ. ...

Economics - Suppose that the MPC = 0.8 and that $12 trillion of real GDP is ...

Econ - Suppose that the government decides to charge cola consumers an excise ...

Science - Can someone please help me with the question below thank you. What do ...

Econ - The crowding-out effect arises when: a. govt borrows in the $ market, ...

Calculus - Suppose f(x) is differentiable at x=a. What does tangent line ...

Calculus - Suppose f(x) is differentiable at x=a. What does tangent line ...

Calculus - Suppose f(x) is differentiable at x=a. What does tangent line ...