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What does it mean when traders are indifferent?

by theBEAST
Tags: indifferent, traders
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theBEAST
#1
Feb4-12, 04:41 PM
P: 368
I have attached a picture of the question that deals with taxes, supply and demand curves and tax revenue.

I don't understand what the question is asking. There is another version of this:
"suppose that traders who are indifferent between trading and not trading do not trade. What is the predicted tax revenue for the government?"

I don't understand what the different between the two is.
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JonDE
#2
Feb4-12, 08:50 PM
P: 59
Quote Quote by theBEAST View Post
I have attached a picture of the question that deals with taxes, supply and demand curves and tax revenue.

I don't understand what the question is asking. There is another version of this:
"suppose that traders who are indifferent between trading and not trading do not trade. What is the predicted tax revenue for the government?"

I don't understand what the different between the two is.
I believe what they are meaning by "indifferent" is neither making or losing money by trading. Although that graph is a little hard for me to understand as it doesn't make much sense. Maybe I am looking at it wrong?


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