If a tax on a good is doubled, the deadweight loss from the tax

Name: If a tax on a good is doubled, the deadweight loss from the tax
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The deadweight loss from a tax is proportional to the square of the tax rate. When the tax is doubled, the tax rate is doubled, so the deadweight loss is multiplied by four. Therefore, the correct answer is C, increases by a factor of four.

If a Tax on a Good Is Doubled, the Deadweight