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Taxing Goods with Very Elastic Supply Generates More Deadweight Loss

Question 160

Multiple Choice

Taxing goods with very elastic supply generates more deadweight loss than taxing goods with very inelastic supply because


A) the amount of the tax is larger.
B) the change in producer behavior is greater.
C) producers have to pay these taxes out of pocket.
D) the change in producer behavior is smaller.
E) the government does not bother collecting the revenue.

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