The Demand for Potted Plants Is More Elastic Than the Demand

question 38

Multiple Choice

The demand for potted plants is more elastic than the demand for wallpaper.Suppose the government levies an equivalent tax on potted plants and wallpaper.The deadweight loss would be larger in the market for

• A) potted plants than in the market for wallpaper because the quantity of potted plants would fall by more than the quantity of wallpaper.
• B) potted plants than in the market for wallpaper because the quantity of wallpaper would fall by more than the quantity of potted plants.
• C) wallpaper than in the market for potted plants because the quantity of potted plants would fall by more than the quantity of wallpaper.
• D) wallpaper than in the market for potted plants because the quantity of wallpaper would fall by more than the quantity of potted plants.