Consider a good to which a per-unit tax applies.The greater the price elasticities of demand and supply for the good,the
A)smaller the deadweight loss from the tax.
B)greater the deadweight loss from the tax.
C)more efficient is the tax.
D)more equitable is the distribution of the tax burden between buyers and sellers.

Question

Quizplus · Accepted Answer

The greater the price elasticities of demand and supply, the more quantity will decrease in response to the tax, leading to a larger deadweight loss.

Consider a Good to Which a Per-Unit Tax Applies