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Donna runs an inn and charges $300 a night for a room, which equals her cost. Sam, Harry, and Bill are three potential customers willing to pay $500, $325, and $250, respectively. When the government levies a tax on innkeepers of $50 per night of occupancy, Donna raises her price to $350. The deadweight loss of the tax is:________

a. $25
b. $50
c. $100
d. $150

Respuesta :

Answer:

a. $25

Explanation:

According to the given situation, the computation of deadweight loss of the tax is shown below:-

Deadweight Loss = 1 ÷ 2 × 1 × ($350 - $300) = 1 ÷ 2 × ($50)

Or, Deadweight Loss = 1 ÷ 2 × ($50)

Or,  Deadweight Loss = $25

Therefore the correct option is a. $25

We simply considered the above values so that the deadweight loss of the ta could come

The deadweight loss of the tax is :

According to the given situation, the computation of deadweight loss of the tax is shown below:-

  • Deadweight Loss = 1 ÷ 2 × 1 × ($350 - $300) = 1 ÷ 2 × ($50)
  • Deadweight Loss = 1 ÷ 2 × ($50)
  • Deadweight Loss = $25

The deadweight loss of the tax is $25.

Thus, the correct answer is a.

Learn more :

https://brainly.com/question/14630562?referrer=searchResults

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