If the government wanted to raise taxes while generating the least amount of deadweight loss,it should raise taxes on a good with a:

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Quizplus · Accepted Answer

If the government wants to generate the least amount of deadweight loss while raising taxes, it should choose a good with a perfectly inelastic demand. In this case, consumers will not change their consumption patterns in response to the tax increase since they have no substitutes for the good. Therefore, there will be no change in the quantity demanded, and the tax will be borne entirely by consumers without any reduction in economic surplus or deadweight loss.

If the Government Wanted to Raise Taxes While Generating the Least