Figure 8-15

question 39

Multiple Choice

Figure 8-15
-Refer to Figure 8-15.Panel (a) and Panel (b) each illustrate a $4 tax placed on a market.In comparison to Panel (a) ,Panel (b) illustrates which of the following statements?

• A)When demand is relatively inelastic,the deadweight loss of a tax is smaller than when demand is relatively elastic.
• B)When demand is relatively elastic,the deadweight loss of a tax is larger than when demand is relatively inelastic.
• C)When supply is relatively inelastic,the deadweight loss of a tax is smaller than when supply is relatively elastic.
• D)When supply is relatively elastic,the deadweight loss of a tax is larger than when supply is relatively inelastic.