The More Elastic the Supply, the Larger the Deadweight Loss

question 169

True/False

The more elastic the supply, the larger the deadweight loss from a tax, all else equal.

---

Definitions:

Incremental Revenue

Additional revenue generated from a new product or service or as a result of making changes to an existing operation or strategy.

Subjective Benefits

Advantages perceived on a personal level, often influenced by individual preferences, experiences, or expectations.

Quantify

To express or measure something in terms of numbers or quantities.

Capital Budgeting

The process by which investors and managers decide which significant investments or projects to undertake, based on potential profitability.