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John Has Been in the Habit of Mowing Carl's Lawn

Question 67

Essay

John has been in the habit of mowing Carl's lawn each week for 20 dinar.John's opportunity cost is 15 dinar,and Carl would be willing to pay 25 dinar to have his lawn mowed.What is the maximum tax the government can impose on lawn mowing without discouraging John and Carl from continuing their mutually beneficial arrangement?

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If the tax is less than 10 dinar,there w...

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