Figure 8-18
-Refer to Figure 8-18.Suppose the government imposes a $1 tax in each of the four markets represented by supply curves S1,S2,S3,and S4.The deadweight will be the smallest in the market represented by
A)S1.
B)S2.
C)S3.
D)S4.

Question

Figure 8-18 
-Refer to Figure 8-18.Suppose the government imposes a $1 tax in each of the four markets represented by supply curves S1,S2,S3,and S4.The deadweight will be the smallest in the market represented by
A)S1. 
B)S2. 
C)S3. 
D)S4.

Quizplus · Accepted Answer

The deadweight loss from a tax is smallest in markets where supply or demand is more inelastic. S1 likely represents the most inelastic supply curve, resulting in the smallest deadweight loss.

Figure 8-18 -Refer to Figure 8-18.Suppose the Government Imposes a $1 Tax