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What Is the Mathematical Formula for the Multiplier? Why Is

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What is the mathematical formula for the multiplier? Why is there a multiplier?


Definitions:

After-Tax Equilibrium

The balance reached in the market after accounting for the effects of taxes.

Socially Optimal Quantity

The level of output or production that maximizes societal welfare, taking into account all external costs and benefits.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.

Pollution

The release of harmful substances or products into the environment as a result of human activity.

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