The Governor Wants to Impose a $1 Excise Tax on Some

question 141

Essay

The governor wants to impose a $1 excise tax on some good-he doesn't care which-but he does want to minimize the deadweight loss.The deadweight loss will be least when:
A.both demand and supply curves are elastic.
B.the demand is elastic and supply is inelastic.
C.the demand is inelastic and supply is elastic.
D.both demand and supply are inelastic.

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Definitions:

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An analytical tool used in Excel for performing what-if analysis with two variables.

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