If a tax did not induce buyers or sellers to change their behavior, it would not cause a deadweight loss.

Question

Quizplus · Accepted Answer

A deadweight loss occurs when a tax causes buyers and sellers to change their behavior, leading to a reduction in the quantity traded below the level that would occur in a free market, thus causing a loss of economic efficiency. If a tax does not change behavior, then it does not lead to this inefficiency or deadweight loss.

If a Tax Did Not Induce Buyers or Sellers to Change