The Deadweight Loss from a Tax

question 17

Multiple Choice

The deadweight loss from a tax:

• A) is zero when demand is perfectly elastic.
• B) is zero when supply is perfectly elastic.
• C) is zero when demand is perfectly inelastic.
• D) is never zero.

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Definitions:

Capital Rationing

The process of restricting the amount of capital available for investment in new projects by a company due to budget constraints.

Managerial Options

Choices or decisions available to managers that allow them to steer the company in different strategic directions.

Strategic Planning

A systematic process for envisioning a desired future and translating this vision into broadly defined goals and a sequence of steps to achieve them.

Marginal Cost

The increase in cost that arises from producing one additional unit of a product or service.