-The above figure shows the supply curves in four different markets.If each of the markets has an identical downward sloping demand curve and the same tax is levied on suppliers,which market would produce the smallest amount of deadweight loss?
A) A
B) B
C) C
D) D
E) A and D

Question

-The above figure shows the supply curves in four different markets.If each of the markets has an identical downward sloping demand curve and the same tax is levied on suppliers,which market would produce the smallest amount of deadweight loss?
A) A 
B) B 
C) C 
D) D 
E) A and D

Quizplus · Accepted Answer

A market with a more inelastic supply curve will produce a smaller deadweight loss when a tax is levied, as the quantity traded changes less. Curve A is the most inelastic among the options.

-The Above Figure Shows the Supply Curves in Four Different