Excise Tax: 2
Excise Tax: 2
Excise taxes are usually levied to raise tax revenues -- not to discourage consumption.
A
B
Price
Quantity
S + tax
S
tax
D
C
DAB = Loss of producer surplus
CDB = Loss of consumer surplus
CAB = Deadweight loss
Demand
Previous slide
Next slide
Back to the first slide
View Graphic Version