1. Outline for Thursday, August 7
Remember
Last homework due Friday
Last quiz on Monday
Review welfare
Pareto Efficiency
Price discrimination
Other pricing methods

2. Shifting curves by taxes
Inverse demand is the highest price buyers are
willing to pay for the next unit
Inverse supply is the lowest price sellers are willing
to be paid for the next unit

3. Shifting curves by taxes
Inverse demand is the highest price buyers are
willing to pay for the next unit
Inverse supply is the lowest price sellers are willing
to be paid for the next unit
So, when a tax is applied to buyers PD(Q)
But when it’s applied to sellers PS(Q)
Illustration: part of hw6, question 4.b