Ec8 - Taxes and Incidence
price ceiling
A legally determined maximum price that sellers can charge
price floor
A legally determined minimum price that sellers may receive
deadweight loss
The reduction in economic surplus resulting from a market not being in competitive equilibrium - the amount of inefficiency in a market
black market
a market in which buying and selling take place at prices that violate government price regulations.
tax incidence
the actual division of the burden of a tax between buyers and sellers in a market. The incidence of the tax is determined by the relative slopes of the demand and supply curves.
marginal cost
the additional cost to a firm of producing one more unit of a good or service
consumer surplus
the dollar benefit consumers receive from buying goods or services in a particular market
producer surplus
the dollar benefit firms receive from buying goods or services in a particular market
