Figure 8-5

-Refer to Figure 8-5. Graph (a) and Graph (b) each illustrate a $4 tax placed on a market. In comparison to Graph (a), Graph (b) illustrates which of the following statements?
A)When demand is relatively inelastic, the deadweight loss of a tax is smaller than when demand is relatively elastic.
B)When demand is relatively elastic, the deadweight loss of a tax is larger than when demand is relatively inelastic.
C)When supply is relatively inelastic, the deadweight loss of a tax is smaller than when supply is relatively elastic.
D)When supply is relatively elastic, the deadweight loss of a tax is larger than when supply is relatively inelastic.

Question

Figure 8-5
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-Refer to Figure 8-5. Graph (a) and Graph (b) each illustrate a $4 tax placed on a market. In comparison to Graph (a), Graph (b) illustrates which of the following statements?
A)When demand is relatively inelastic, the deadweight loss of a tax is smaller than when demand is relatively elastic. 
B)When demand is relatively elastic, the deadweight loss of a tax is larger than when demand is relatively inelastic. 
C)When supply is relatively inelastic, the deadweight loss of a tax is smaller than when supply is relatively elastic. 
D)When supply is relatively elastic, the deadweight loss of a tax is larger than when supply is relatively inelastic.

Quizplus · Accepted Answer

The Answer of Figure 8-5
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-Refer to Figure 8-5. Graph (a) and Graph (b) each illustrate a $4 tax placed on a market. In comparison to Graph (a), Graph (b) illustrates which of the following statements?
A)When demand is relatively inelastic, the deadweight loss of a tax is smaller than when demand is relatively elastic. 
B)When demand is relatively elastic, the deadweight loss of a tax is larger than when demand is relatively inelastic. 
C)When supply is relatively inelastic, the deadweight loss of a tax is smaller than when supply is relatively elastic. 
D)When supply is relatively elastic, the deadweight loss of a tax is larger than when supply is relatively inelastic.

Figure 8-5 ​

Figure 8-5