The Deadweight Loss from a Tax of $2 Per Unit

question 3

Multiple Choice

The deadweight loss from a tax of $2 per unit will be smallest in a market with

• A)inelastic supply and elastic demand.
• B)inelastic supply and inelastic demand.
• C)elastic supply and elastic demand.
• D)elastic supply and inelastic demand.

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Definitions:

Diploma Covers

Protective and decorative holders for diplomas or certificates, often used during graduation ceremonies or as a display method.

Optimal Order

An optimal order refers to the most efficient, cost-effective quantity of items to purchase or produce that minimizes total costs including ordering, holding, and shortage costs.

Black Market

An illegal trading environment where goods or services are exchanged outside of authorized channels.

Bookstore

A retail establishment that primarily sells books, often alongside related items such as magazines and stationery.