When a tax does not have a deadweight loss,the reduction in surplus is exactly offset by tax revenue collected by the government.

Question

Quizplus · Accepted Answer

When a tax does not have a deadweight loss, it means that the tax does not significantly affect the behavior of buyers or sellers in the market, and therefore, there is no inefficiency in the market. In such a case, the reduction in surplus due to the tax is exactly equal to the tax revenue collected by the government, and there is no net loss or gain to society.

When a Tax Does Not Have a Deadweight Loss,the Reduction