Indirect Taxation and Government Intervention: Analyzing through Economic Models

The video explores indirect taxation as a form of government intervention to address market failures, particularly in cases of over-provision. It covers the types of fiscal interventions, including unit and ad valorem taxes, and their effects on supply and demand. The video also explains how indirect taxes can internalize externalities using supply-demand and marginal cost-benefit frameworks, with examples like congestion charging. The goal is to improve market welfare by aligning private decisions with social costs.

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