When a good is taxed, the deadweight loss is larger the more elastic are demand and supply.

Name: When a good is taxed, the deadweight loss is larger the more elastic are demand and supply.
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Quizplus · Accepted Answer

When demand and supply are more elastic, consumers and producers are more responsive to price changes, leading to larger reductions in quantity traded and thus a larger deadweight loss when a tax is imposed.

When a Good Is Taxed, the Deadweight Loss Is Larger