The deadweight loss from a tax on a good equals the tax revenue that goes to the government.

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The deadweight loss from a tax on a good represents the economic inefficiency caused by reducing the quantity traded in the market, which results in a loss of producer and consumer surplus. The tax revenue collected by the government is typically a fraction of the deadweight loss, as some of the tax burden is passed on to consumers and producers in the form of higher prices and reduced income, causing fewer transactions overall. Therefore, the deadweight loss is generally greater than the tax revenue collected by the government.

The Deadweight Loss from a Tax on a Good Equals