Assume the same upward supply curve for each of the following goods. Considering demand only, a tax on _____ would result in the largest deadweight loss.

Question

Quizplus · Accepted Answer

Restaurant meals likely have more elastic demand compared to the other goods listed, meaning consumers are more responsive to price changes. A tax on goods with elastic demand results in a larger deadweight loss.

Assume the Same Upward Supply Curve for Each of the Following