Consider the Laffer curve for a hypothetical good as displayed in the graph shown. Which of the following statements is correct? At a tax rate of 30 percent, the price effect outweighs the quantity effect.The efficient tax rate is 60 percent.At a tax rate of 80 percent, deadweight loss will increase if the tax rate is lowered.

Question

Consider the Laffer curve for a hypothetical good as displayed in the graph shown.  Which of the following statements is correct? At a tax rate of 30 percent, the price effect outweighs the quantity effect.The efficient tax rate is 60 percent.At a tax rate of 80 percent, deadweight loss will increase if the tax rate is lowered.

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The Answer of Consider the Laffer curve for a hypothetical good as displayed in the graph shown.  Which of the following statements is correct? At a tax rate of 30 percent, the price effect outweighs the quantity effect.The efficient tax rate is 60 percent.At a tax rate of 80 percent, deadweight loss will increase if the tax rate is lowered.

Consider the Laffer Curve for a Hypothetical Good as Displayed