To minimize deadweight loss,markets where demand is relatively _____ and supply is relatively _____ should be taxed.

Question

Quizplus · Accepted Answer

To minimize deadweight loss, it's best to tax markets where both demand and supply are relatively inelastic. In such markets, the quantity traded is less sensitive to price changes, resulting in a smaller reduction in trade volume and thus a smaller deadweight loss when a tax is imposed.

To Minimize Deadweight Loss,markets Where Demand Is Relatively _____ and Supply