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How to calculate tax revenue

How to calculate tax revenue

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Answer #1

Answer :-

Tax Revenue can be calculated by multiplying Size of the tax by the quantity sold.

R=TxQ

Tax revenue equals the area of the rectangle between the supply and demand curves.

If T is the size of the tax and Q is the quantity of the good sold, then TR = TxQ

We use the govt. tax revenue to measure the public benefit/ economic well-being

If we double the size of the tax, the base and height of the triangle double, so the deadweight loss rises by a factor of 4.

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