Taxes have no deadweight loss when:
A)they are equitable
B)they are equitable and efficient
C)they are efficient
D)it is very rare for a tax to have no deadweight loss

Question

Quizplus · Accepted Answer

Deadweight loss is an inefficiency that can occur when the tax price of a good or service is different from its market equilibrium price. It is very rare for a tax to have no deadweight loss because taxes typically distort market behavior by making goods or services either more expensive for consumers or less profitable for producers, leading to a decrease in the quantity traded below the socially optimal level.

Taxes Have No Deadweight Loss When