When Airbnb customers in Malibu start paying hotel taxes, this will have the potential to raise the equilibrium price in this market and, therefore, decrease efficiency.This would have a tendency to

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When the equilibrium price in a market increases due to the introduction of taxes, consumers will face a higher price and will purchase less. This will result in a decrease in consumer surplus, as they are willing to pay a certain amount for the service but now have to pay more. This decrease in demand will also result in a decrease in producer surplus, as sellers will have to sell less at a lower price. The introduction of taxes can also create deadweight loss, which is a loss of economic efficiency in the market. Therefore, the best choice is B, which describes a decrease in consumer surplus and an increase in deadweight loss.

When Airbnb Customers in Malibu Start Paying Hotel Taxes, This