Even if a tax imposed in a market generates a loss in surplus for the participants in that market, the tax could still increase economic efficiency if:

Question

Quizplus · Accepted Answer

Even if a tax imposed in a market produces a loss in surplus for the participants in that market, the tax could still increase total economic surplus if the tax led to an even larger increase in surplus from the public expenditures it financed.

Even If a Tax Imposed in a Market Generates a Loss