When the price of a good is measured in dollars,then the size of the deadweight loss that results from taxing that good is measured in
A)units of the good that is being taxed.
B)units of another good that is not being taxed.
C)dollars.
D)abstract units of measurement that reflect the well-being of the society.

Question

Quizplus · Accepted Answer

Since deadweight loss is the loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved because of a tax, it is measured in dollars as well, since it represents the decrease in consumer and producer surplus due to the tax.

When the Price of a Good Is Measured in Dollars,then