The deadweight loss of an excise tax arises because the tax prevents some mutually beneficial transactions.

Name: The deadweight loss of an excise tax arises because the tax prevents some mutually beneficial transactions.
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Deadweight loss occurs when an excise tax causes buyers and sellers to trade less, leading to mutually beneficial transactions that do not occur. This results in a loss of economic efficiency and a net reduction in social welfare.

The Deadweight Loss of an Excise Tax Arises Because the Tax