For a Tax on a Good, the Deadweight Loss Is

question 80

Multiple Choice

For a tax on a good, the deadweight loss is small when price elasticity of demand is low because of

• A)a large difference between the efficient quantity of demand and the quantity demanded with the tax.
• B)a small difference between the efficient quantity of demand and the quantity demanded with the tax.
• C)a large difference between the efficient quantity of demand and the efficient quantity of supply.
• D)a small difference between the efficient quantity of demand and the efficient quantity of supply.
• E)a small difference between the efficient quantity of supply and the quantity supplied with the tax.