Question

The deadweight loss from a tax is likely to be greater with a good that has:

A. -many substitute B -an inelastic supply
C -an inelastic demandD. -few compliments

Answer 1

A. -many substitute

Step-by-step explanation:

Deadweight loss is inefficiency that occurs as a result of taxation. It's the change in production or consumption as a result of tax.

If tax is imposed on a good with many substitutes, the deadweight loss would be greater because consumers can easily shift consumption to another good that is cheaper.

If a good has inelastic supply or demand, the deadweight loss is less because consumers and producers do not change quantity demanded and supplied if prices increase as a result of tax.

I hope my answer helps you.