A per-unit tax will result in a deadweight loss unless the tax causes no change in:
A) the price consumers pay.
B) the price producers receive after paying it.
C) equilibrium quantity sold.
D) either equilibrium price or equilibrium quantity.

Question

Quizplus · Accepted Answer

A per-unit tax causes a deadweight loss when it reduces the equilibrium quantity sold, as it leads to a loss of economic efficiency. If the equilibrium quantity remains unchanged, there is no deadweight loss.

A Per-Unit Tax Will Result in a Deadweight Loss Unless