sp25-econ101 econ101
Lecture 09: Taxes and incidence Lecture 09: Taxes and incidence
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Sign in to readLecture 09: Taxes and incidence
A tax creates a wedge
Revenue and deadweight loss
Distribution and incentives
Figures from the lecture
Example: tax on airplane travel
Airline pays the tax
Passenger pays the tax
Elastic demand, inelastic supply
Elastic demand, inelastic supply
Inelastic demand, elastic supply
Inelastic demand, elastic supply
Deadweight loss, illustrated
DWL with elastic demand/supply
DWL with inelastic demand/supply
What should we tax?