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

Question

Quizplus · Accepted Answer

When the supply curve is less elastic, the quantity supplied does not decrease significantly with the tax, leading to a smaller deadweight loss because the reduction in traded quantity is smaller.

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