Suppose a tax of $1 per unit is imposed on a good.The more elastic the supply of the good,other things equal,
A)the smaller is the response of quantity supplied to the tax.
B)the larger is the tax burden on sellers relative to the tax burden on buyers.
C)the larger is the deadweight loss of the tax.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

The more elastic the supply, the more responsive sellers are to price changes, leading to a larger decrease in quantity supplied and thus a larger deadweight loss when a tax is imposed.

Suppose a Tax of $1 Per Unit Is Imposed on a Good.The