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Which of the Following Is True About an Increase of a Per-Unit

Question 11

Multiple Choice

Which of the following is true about an increase of a per-unit tax in a goods market where the good is quasilinear assuming neither supply nor demand is perfectly inelastic:


A) The more price elastic either demand or supply, the lower will be tax revenue.
B) The more price elastic either demand or supply, the greater will be deadweight loss.
C) The higher the tax rate, the greater the fraction of deadweight loss over revenue.
D) Both (a) and (b)
E) Both (b) and c
F) Both (a) and (c)
G) All of the above
H) None of the above

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