Consider the property tax model. Assume that housing supply curve is upward sloping. Draw the following...

Consider the property tax model. Assume that housing supply curve is upward sloping. Draw the following two diagrams.
1) a diagram showing equilibrium before the property tax on housing. Indicate equilibrium price, quantity, consumer surplus, and producer surplus on the diagram.
2) a diagram showing how equilibrium changes due to the property tax on housing. Specifically, mark the original equilibrium before tax, the new equilibrium after tax, tax burdens borne by developer and households, consumer surplus, producer surplus, government tax revenue, and deadweight loss due to the tax.

Expert Solution

Rahul Sunny answered 7 months ago

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