Figure 8-16

Figure 8-16
-Refer to Figure 8-16. Panel a) and Panel b) each illustrate a $2 tax placed on a market. In comparison to Panel b) , Panel a) illustrates which of the following statements?

A) When demand is relatively inelastic, the deadweight loss of a tax is smaller than when demand is relatively elastic.
B) When demand is relatively elastic, the deadweight loss of a tax is larger than when demand is relatively inelastic.
C) When supply is relatively inelastic, the deadweight loss of a tax is smaller than when supply is relatively elastic.
D) When supply is relatively elastic, the deadweight loss of a tax is larger than when supply is relatively inelastic.