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An excess burden is taxation or regulation that is so intensive that it prevents markets from functioning normally. For example, few firms may be able to compete in an extremely regulated environment leading to inefficiencies such as monopolies. |
Area | | Definition | Taxes or regulations that are so severe that they cause market inefficiencies and failures. | Example | Burdensome regulations that act as a barrier to entry reducing competition and causing abnormally high prices in a particular industry. | Related Concepts | |
Economics
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