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2.5 Effects of increasing and decreasing the tax rate on the economic surplus. 3 Effects of sales tax on a single good in a monopolist-controlled market. 3.1 Consumer surplus goes down. 3.2 Producer surplus goes down, and in fact (producer surplus + government surplus) stays the same or goes down. But here, a tax could actually prevent a dead weight loss because if you have a 2 cent tax, essentially adding the cost of the negative externality in the form of a tax on top of the supplier's cost right over here, you are going to cause the equilibrium quantity to be the quantity where you're not generating all of this negative surplus, and.

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