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Parinita Raina
on Oct 26, 2024

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If demand is perfectly inelastic,the deadweight loss caused by a tax will be zero.

Perfectly Inelastic

Describes a situation in which the quantity demanded of a good does not change regardless of changes in its price.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is unachievable.

Tax

A required financial fee or another kind of duty enforced on a taxpayer by government authorities, designed to raise funds for government outlays and a range of public expenses.

  • Interpret how taxes influence market outcomes, including deadweight loss and changes to consumer and producer surplus.
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Kavya SunilOct 30, 2024
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