The deadweight loss from a tax on a good equals
A)government tax revenues.
B)the difference between the loss in consumer surplus and the gain in producer surplus.
C)the difference between the gain in consumer surplus and the loss in producer surplus.
D)the total gain in consumer surplus and producer surplus.
E)the total loss in consumer surplus and producer surplus.

Question

Quizplus · Accepted Answer

Deadweight loss from a tax on a good is the total loss in consumer and producer surplus that occurs because the tax reduces the quantity of the good sold, leading to inefficiencies in the market. This loss is not offset by government tax revenues; it represents the economic value that is not created due to the tax.

The Deadweight Loss from a Tax on a Good Equals