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

Question

Quizplus · Accepted Answer

Deadweight loss occurs when a tax changes the behavior of either buyers or sellers, leading to a reduction in the quantity exchanged and a loss in welfare compared to a scenario with no tax. If the tax does not alter behavior, there will be no change in quantity or welfare, and therefore, no deadweight loss.

If a Tax Did Not Induce Buyers or Sellers to Change