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12 October, 06:34

Wilma values a decorative garden rock at $15, while Fred values it at $10. The price of a decorative garden rock is $9. If the government imposes a $2 tax per decorative garden rock and the price of the rock rises to $11, what part of the deadweight loss comes from Wilma, and what part comes from Fred?

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  1. 12 October, 08:27
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    he part of the of the dead weight loss for Wilma is = $2

    while the part of the dead weight loss for Fred is = $1

    Explanation:

    Wilma value for a decorative garden stock is = $15

    Fred value is at = $10

    which together is given as

    Wilma garden stock + Fred garden stock value = 25$

    Government Tax for the decorative garden = $2

    Price of stock rises at = $11

    Therefore,

    The part of the of the dead weight loss for Wilma is = $2

    while the part of the dead weight loss for Fred is = $1
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