The Demand for Bread Is Less Elastic Than the Demand

question 220

True/False

The demand for bread is less elastic than the demand for donuts; hence,a tax on bread will create a larger deadweight loss than will the same tax on donuts,all else equal.

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Definitions:

Trade

The trading of goods, services, or a combination of both among two or more entities.

Large Cities

Urban areas with a large population density and extensive systems for housing, transportation, sanitation, utilities, land use, and communication.

Day-to-Day Activities

The regular or routine actions that individuals undertake on a daily basis for personal or professional purposes.

Income

The financial gain obtained by an individual or entity from work, investment, or other sources.