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Explain about the deadweight loss and elasticities.
Deadweight Loss and Elasticities:
The common rule for economic policy is the other things equal; you need to select the policy which produces the smallest deadweight losses. But how we can be forecast the size of the deadweight loss related with a specified policy.
For a tax imposed while demand or supply, or both, is inelastic will origin a relatively small reduce in quantity transacted and a small deadweight loss.
use the concept of the income elasticity of demand to explain the difference necessities, luxuries and inferior goods
Closesubstitute goods: The number of closesubstitute goods The more substitutes of good has and the more close the substitutes are, the more elastic the demand for the good. Fo
edge worth model
is south africa''s economic system now more allocative efficient
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If demand goes down what happens to the equilibrium?
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