The size of a tax and the deadweight loss that results from the tax are
A)positively related.
B)negatively related.
C)independent of each other.
D)equal to each other.

Question

Quizplus · Accepted Answer

The size of a tax and the deadweight loss resulting from the tax are positively related because as the size of the tax increases, it distorts market behavior more, leading to greater inefficiencies and a larger deadweight loss.

The Size of a Tax and the Deadweight Loss That