Which of the Following Statements Correctly Describes the Relationship Between

question 43

Multiple Choice

Which of the following statements correctly describes the relationship between the size of the deadweight loss and the amount of tax revenue as the size of a tax increases from a small tax to a medium tax and finally to a large tax?

• A)Both the size of the deadweight loss and tax revenue increase.
• B)The size of the deadweight loss increases,but the tax revenue decreases.
• C)The size of the deadweight loss increases,but the tax revenue first increases,then decreases.
• D)Both the size of the deadweight loss and tax revenue decrease.