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Explain in Your Own Words Why the Imposition of a Tax

question 106

Essay

Explain in your own words why the imposition of a tax results in a deadweight loss. Given this, should we eliminate all taxes on goods/services because they result in deadweight losses? Explain why or why not.


Definitions:

Existing Market

A market where products or services are already available and where a business may face competition upon entry.

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