Studied by 0 peopleindirect taxes
charges placed on goods and services by the government and they increase production costs for producers; they are used by the government to raise revenue and also to reduce consumption of some products
subsidy
a grant given which lowers the price of a good, it is usually designed to encourage the production or consumption of a particular good or service
maximum price
a legally imposed price for a good that the suppliers cannot charge above
minimum price
a legally imposed price at which the price of the good cannot go below
trade pollution permit
a permission issued, usually by a government, to allow a fixed amount of pollution to be created; this permit can be used by the owner or sold to another firm
government failure
occurs when government intervention leads to a net welfare loss compared to the free market solution; the total social costs arising from the intervention are greater than the social benefit
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