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Hatshy [7]
3 years ago
14

Suppose a tax of $1 per unit is imposed on a good. The more elastic the supply of the good, other things equal:

Business
1 answer:
AlladinOne [14]3 years ago
3 0

Answer:

c. the larger is the deadweight loss of the tax.

Explanation:

Supply is elastic if a small change in price has a greater effect on quantity supplied.

If a tax is imposed, and supply in elastic, the quantity supplied would fall.

Deadweight loss is when quantity supplied reduces as a result of tax.

If supply is elastic, the larger is the deadweight loss of the tax.

I hope my answer helps you

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