Refer to Figure 8-6. Suppose the government imposes a $1 tax in each of the four markets represented by demand curves D₁, D₂, D₃, and D₄. The deadweight will be the smallest in the market represented by

A) D₁.
B) D₂.
C) D₃.
D) D₄.

Question

Kruti Mittal · Accepted Answer

Final Answer : A, Explanation :  The deadweight loss from a tax is smallest in the market with the most inelastic demand, which is represented by D 1 .

Refer to Figure 8-6. Suppose the government imposes a $1 tax in each of the four markets represented by demand curves D₁, D₂, D₃, and D₄. The deadweight will be the smallest in the market represented by

A) D₁.
B) D₂.
C) D₃.
D) D₄.

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Learning Objectives

Related questions

Refer to Figure 8-6. Suppose the government imposes a $1 tax in each of the four markets represented by demand curves D1, D2, D3, and D4. The deadweight will be the smallest in the market represented byA) D1.B) D2.C) D3.D) D4.

Definitions

Learning Objectives

Learning Objectives

Related questions

Refer to Figure 8-6. Suppose the government imposes a $1 tax in each of the four markets represented by demand curves D₁, D₂, D₃, and D₄. The deadweight will be the smallest in the market represented by

A) D₁.
B) D₂.
C) D₃.
D) D₄.