A Tax on a Product Causes a Deadweight Loss Because

Multiple Choice

A tax on a product causes a deadweight loss because:

A) ​some consumer surplus is transferred from buyers to producers.
B) ​some producer surplus is transferred from producers to consumers.
C) ​some consumer and producer surplus is transferred to the government.
D) ​it distorts the incentives of producers and consumers so that the efficient level of output is not produced.