If there is a tax on both medicine and sugar, ceteris paribus, how will the deadweight losses in each market compare?

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Quizplus · Accepted Answer

Sugar is a good with a relatively elastic demand, meaning that consumers are more sensitive to changes in price. This makes the deadweight loss from a tax on sugar larger than the deadweight loss from a tax on medicine, which is a necessity for many consumers and has a relatively inelastic demand.

If There Is a Tax on Both Medicine and Sugar