Because the supply of land is perfectly inelastic, the deadweight loss of a tax on land is high.

Question

Quizplus · Accepted Answer

The supply of land cannot be increased or decreased in response to changes in the market demand. Therefore, if a tax is imposed on land, the burden of the tax cannot be shifted onto the landowner, and they will have to bear the full burden of the tax. This leads to a high deadweight loss because the tax causes a significant distortion in the market equilibrium, resulting in a loss of economic efficiency.

Because the Supply of Land Is Perfectly Inelastic, the Deadweight