The amount of deadweight loss from taxes depends on:
A)the price elasticity of demand and supply
B)how much of the tax revenue the government plans to spend
C)the product the government is planning to tax
D)all of the above are correct

Question

Quizplus · Accepted Answer

The amount of deadweight loss from taxes depends on the price elasticity of demand and supply. The higher the elasticity, the greater the deadweight loss. The other options may affect the distribution of the deadweight loss but not the overall amount.

The Amount of Deadweight Loss from Taxes Depends On