For an Excise Tax Which Causes Output in a Market

question 77

Multiple Choice

For an excise tax which causes output in a market to fall to zero:

• A)the tax revenue and deadweight loss are both zero.
• B)the tax revenue is positive but there is no deadweight loss.
• C)the deadweight loss is equal to the total surplus before the tax.
• D)the deadweight loss is equal to the producer's surplus.

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