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Suppose Luke Values a Scoop of Italian Gelato at $4

Question 42

Multiple Choice

Suppose Luke values a scoop of Italian gelato at $4. Leia values a scoop of Italian gelato at $6. The pre-tax price of a scoop of Italian gelato is $2. The government imposes a "fat tax" of $3 on each scoop of Italian gelato, and the price rises to $5. The deadweight loss from the tax is


A) $1.
B) $2.
C) $3.
D) $4.

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