Other things being equal, a tax on producers results in deadweight loss.

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When a tax is imposed on producers, they may decide to produce less of the taxed good or service to avoid the cost of the tax. This decrease in production leads to a reduction in supply, which can cause an increase in the price of the good or service. Additionally, the tax can cause a misallocation of resources and prevent mutually beneficial exchanges from occurring, resulting in deadweight loss.

Other Things Being Equal, a Tax on Producers Results in Deadweight