If the supply of labour is inelastic, the deadweight loss from labour taxes is large.

Name: If the supply of labour is inelastic, the deadweight loss from labour taxes is large.
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When the supply of labor is inelastic, the deadweight loss from labor taxes is smaller because inelastic supply means workers' quantity of labor supplied does not significantly change with changes in the wage rate, resulting in less distortion in the labor market.

If the Supply of Labour Is Inelastic, the Deadweight Loss