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The deadweight loss from a tax of $2 per unit will be smallest in a market with a. elastic supply and elastic demand. b. inelastic supply and inelastic demand. c. elastic supply and inelastic demand. d.
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The deadweight loss from a tax of $2 per unit will be smallest in a market with a. elastic supply and elastic demand. b. inelastic supply and inelastic demand. c. elastic supply and inelastic demand. d. inelastic supply and elastic demand.

User Ed Boykin
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1 Answer

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Answer:

b. inelastic supply and inelastic demand

Step-by-step explanation:

Is supply and demand is inelastic, imposition of tax will not lead change in supply and demand much. So, DWL will be smallest.

User Patrick Wilkes
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