Other things equal, for a given tax, if the demand curve is more elastic,
a. the greater the tax revenue raised and the greater the deadweight cost of the tax.
b. the greater the tax revenue raised and the smaller the deadweight cost of the tax.
c. the less the tax revenue raised and the greater the deadweight cost of the tax.
d. the less the tax revenue raised and the smaller the deadweight cost of the tax.
c
You might also like to view...
The decreasing portion of a firm's long run average cost curve is attributable to:
a. economies of scale. b. diseconomies of scale. c. increasing marginal cost. d. constant returns to scale.
Surveys show that a small increase in the price of organic potatoes will cause most people to switch to other alternatives such as packaged mashed potatoes. This finding suggests that the demand curve for organic potatoes is
a. relatively steep. b. relatively flat. c. upward sloping. d. vertical.