Deadweight loss measures the loss
A)in a market to buyers and sellers that is not offset by an increase in government revenue.
B)in revenue to the government when buyers choose to buy less of the product because of the tax.
C)of equality in a market due to government intervention.
D)of total revenue to business firms due to the price wedge caused by the tax.

Question

Quizplus · Accepted Answer

Deadweight loss measures the net loss of total surplus to buyers and sellers in a market caused by market inefficiencies, such as taxes or subsidies, that are not offset by any gains in government revenue.

Deadweight Loss Measures the Loss