Deadweight Loss Is Minimized When a Tax Is Levied on Something

question 76

Multiple Choice

Deadweight loss is minimized when a tax is levied on something for which people:

• A) are not likely to change their behavior much in response to a price change.
• B) are very likely to change their behavior in response to a price change.
• C) have a large income elasticity of demand.
• D) have a small income elasticity of demand.

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