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The Governor Wants to Levy a $1 Excise Tax on a Product

Question 2

Multiple Choice

The governor wants to levy a $1 excise tax on a product but wants to minimize the deadweight loss.The deadweight loss will be LEAST when the demand curve is _____ and the supply curve is _____.


A) elastic;elastic
B) elastic;inelastic
C) inelastic;elastic
D) inelastic;inelastic

Correct Answer:

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