If a per-unit tax is imposed on producers in a market that is in equilibrium,the more elastic the supply curve,the
A) more likely the deadweight loss is to be affected.
B) larger the deadweight loss.
C) larger the deadweight loss to producers.
D) smaller the deadweight loss to consumers.
E) smaller the deadweight loss.

Question

Quizplus · Accepted Answer

The more elastic the supply curve, the larger the deadweight loss because producers are more responsive to price changes, leading to a greater reduction in quantity supplied and thus a larger inefficiency in the market.

If a Per-Unit Tax Is Imposed on Producers in a Market