If the labour supply curve is nearly vertical,what will a tax on labour do
A)have a large deadweight loss
B)raise small amounts of tax revenue
C)have little impact on the amount of work workers are willing to do
D)shift the labour demand curve to the right

Question

Quizplus · Accepted Answer

If the labour supply curve is nearly vertical, it means that the quantity of labour supplied does not change much in response to changes in the wage rate. Therefore, a tax on labour will have little impact on the amount of work workers are willing to do. This means that the tax will not create a large deadweight loss or raise small amounts of tax revenue. It also will not shift the labour demand curve to the right.

If the Labour Supply Curve Is Nearly Vertical,what Will a Tax