If the government wants to minimize the deadweight loss from taxes,it should tax goods for which the:

Question

Quizplus · Accepted Answer

When the price elasticity of demand is low, it means that consumers are less sensitive to changes in price, which means they will continue to purchase the good even after their price has been taxed. This means that tax revenue can be collected without a significant reduction in the quantity demanded, while also reducing the deadweight loss that results from the tax. Therefore, taxing goods with a low price elasticity of demand is the best choice for minimizing the deadweight loss from taxes.

If the Government Wants to Minimize the Deadweight Loss from Taxes,it