The demand for bread is less elastic than the demand for donuts; hence, ceteris paribus, a tax on bread will create a larger deadweight loss than will the same tax on donuts.
Correct Answer:
Verified
Q1: The effect of a tax on a
Q3: One of the important economic costs of
Q5: The deadweight loss of a tax increases
Q6: A tax on luxuries will create a
Q7: Because taxes distort incentives, they cause markets
Q7: Suppose the supply curve becomes more inelastic,
Q8: Suppose the demand curve becomes more elastic,
Q10: When a tax is imposed on a
Q184: Often,the tax revenue collected by the government
Q196: If a tax did not induce buyers
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents