Asked by
Parinita Raina
on Oct 26, 2024Verified
If demand is perfectly inelastic,the deadweight loss caused by a tax will be zero.
Perfectly Inelastic
Describes a situation in which the quantity demanded of a good does not change regardless of changes in its price.
Deadweight Loss
A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is unachievable.
Tax
A required financial fee or another kind of duty enforced on a taxpayer by government authorities, designed to raise funds for government outlays and a range of public expenses.
- Interpret how taxes influence market outcomes, including deadweight loss and changes to consumer and producer surplus.
Verified Answer
KS
Learning Objectives
- Interpret how taxes influence market outcomes, including deadweight loss and changes to consumer and producer surplus.