If the government wants to minimize the deadweight loss of taxation, which of the following items are good candidates for an exc

Question

mihalych1998 [28]

2 years ago

15

If the government wants to minimize the deadweight loss of taxation, which of the following items are good candidates for an exc

ise tax? (select all that apply)A. emergency plumber servicesB. Coca-ColaC. insulinD. food at restaurants

Business

1 answer:

lesantik [10] · Answer 1 · 2022-09-08T03:19:44+03:00

Answer:

A. emergency plumber services and C.insulin.

Explanation:

From the list provided the best candidates for this would be emergency plumber services and insulin. That is because these are items or services that have a high supply but low demand due to the population of customers being a minority. This, therefore, causes market inefficiency which leads to deadweight loss. Other items like Coca-Cola and food mostly stay in equilibrium because products are made depending on the current demand and the customer population is the vast majority.