When will a tax cause no deadweight loss ? DSPQQ0Q1DPbuyerPsellertax
When will a tax cause no deadweight loss ? DSPQQ0PbuyerPsellertaxWhen S or D is perfectly inelasticWhy? No reduction inquantity traded
•True or false ?•If a tax raises no revenue it will produce no deadweight loss–No tax revenue D = 0•FALSE–A large enough tax can wipe out a market (Q =0)