The demand for chicken wings is more elastic than the demand for razor blades.Suppose the government levies an equivalent tax on chicken wings and razor blades.The deadweight loss would be larger in the market for
A)chicken wings than in the market for razor blades because the quantity of chicken wings would fall by more than the quantity of razor blades.
B)chicken wings than in the market for razor blades because the quantity of razor blades would fall by more than the quantity of chicken wings.
C)razor blades than in the market for chicken wings because the quantity of chicken wings would fall by more than the quantity of razor blades.
D)razor blades than in the market for chicken wings because the quantity of razor blades would fall by more than the quantity of chicken wings.

Question

Quizplus · Accepted Answer

The demand for chicken wings is more elastic than the demand for razor blades, which means that consumers are more responsive to changes in price for chicken wings than for razor blades. Therefore, a tax on chicken wings and razor blades would lead to a greater decrease in quantity demanded for chicken wings than for razor blades, resulting in a larger deadweight loss in the chicken wing market.

The Demand for Chicken Wings Is More Elastic Than the Demand