The Impact of Car Production Tax On Social Welfare

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The Impact of Car Production Tax on Social Welfare

Social Cost
Supply (private cost)
(a)
P2
(b) (f)
P1 Optimal Equilibrium
(c) (g)
P0 Market Equilibrium
(h)

(d)

(e)
Price of Automobiles

Demand

Q2 Q1 Q0
Quantity of Automobiles

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