To calculate the deadweight loss from the tax

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Suppose that the equilibrium quantity in the market for widgets has been 200 per month. Then a tax of $5 per widget is imposed on widgets. The price paid by buyers increases by $2 and the after-tax price received by sellers falls by $3. The government is able to raise $750 per month in revenue from the tax.

The deadweight loss from the tax is.

Reference no: EM13200906

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