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If the Government Imposes a $2 Tax on Pizza and So

Question 45

Multiple Choice

If the government imposes a $2 tax on pizza and so the price of pizza rises from $7 to $9, the deadweight loss will arise from:


A) the pizza suppliers who lose $2 of revenue
B) the consumers who pay the tax
C) the government which pays $2 to the taxpayer
D) the consumers who change their behaviour and stop buying pizza as a result of the tax

Correct Answer:

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