A tax creates no deadweight loss only when either supply or demand is

Name: A tax creates no deadweight loss only when either supply or demand is
Brand: Quizplus
Rating: 4.9 (54 reviews)

Question

Quizplus · Accepted Answer

A perfectly inelastic supply or demand means that the quantity supplied or demanded does not change in response to changes in price. Therefore, a tax would not create deadweight loss since it would simply be absorbed by either the producers or consumers without affecting the equilibrium quantity.

A Tax Creates No Deadweight Loss Only When Either Supply