The demand for bread is less elastic than the demand for donuts; hence,a tax on bread will create a larger deadweight loss than will the same tax on donuts,all else equal.

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Quizplus · Accepted Answer

A tax on a good with less elastic demand, like bread, will create a smaller deadweight loss compared to a good with more elastic demand, like donuts, because consumers are less responsive to price changes.

The Demand for Bread Is Less Elastic Than the Demand