Asked by
Cristin Payne
on Oct 25, 2024Verified
If demand is inelastic,then deadweight loss will:
A) be minimized if supply is also inelastic.
B) be maximized if supply is also inelastic.
C) decrease if demand becomes more elastic.
D) increase if supply becomes more inelastic.
Deadweight Loss
An inefficiency in the economy caused by the lack of or inability to attain equilibrium in the market for a particular good or service.
Inelastic
Describing a situation where the demand or supply for a product does not significantly change in response to a change in price.
- Examine the impact of tax elasticity on both deadweight loss and tax income.
Verified Answer
AP
Learning Objectives
- Examine the impact of tax elasticity on both deadweight loss and tax income.