Build the chain of reasoning
Equations behind the diagram
Q* = (a − c)/(b + d); P* = a − bQ*. With specific tax t: Q = (a − c − t)/(b + d). With subsidy s, replace t with −s. Point PED magnitude = P*/(bQ*); PES = P*/(dQ*). With constant marginal external cost e, the social optimum is Qs = (a − c − e)/(b + d).
Experiment notebook
Record results as you explore, then download your notes. Observations are held in this page only.
| Lab | Price paid | Quantity traded* | PED at free equilibrium | Your reasoning |
|---|---|---|---|---|
| No observations yet. Change a condition, then record your findings. | ||||
*For binding controls: maximum possible trades without government purchases.
Check your reasoning
Self-review checklist, not an automated mark or grade.
Keep the distinctions clear
Own price changes cause movement along a curve. Other determinants shift it.
Elasticity compares percentage changes. It depends on the position on a linear curve.
Tax revenue is a transfer. Welfare loss reflects lost net benefits from trades.
Social costs include external costs imposed on third parties.